08 Dec 2022

Parliament has approved a request by the Minister of Finance Ms Peggy Serame to resolve that a government guarantee for P300 million be extended to Botswana Meat Commission (BMC) in favour of First National Botswana Bank Limited.

Earlier tabling the request Tuesday night, Ms Serame said government had seen it fit to support the BMC in its bid to raise funds from the financial markets as it was a strategic institution whose revival could greatly boost the development of agriculture in the country, particularly the beef sector.

She explained that Section 22 of the Public Finance Management Act provided that if the finance minister is satisfied that it is in the public interest, she might, on behalf of government, guarantee the repayment of the principal money and payment of interest or other incidental charges raised on any loan by a statutory body wholly or partially owned by government.

Ms Serame said the BMC sought to finance its Meriting Growth Strategy which would be beneficial to the development of the livestock production industry in Botswana.

The strategy envisions the production of premium meat and related products for the global market in collaboration with other players in the beef value chain, and the purchase of livestock at competitive prices, Ms Serame said.

She further noted that the strategy sought to make the BMC a better corporate entity attractive to valuable partnerships with private sector investors and joint venture collaborations.

She said over the years, the BMC faced acute financial challenges which they have been actively working to overcome.

Ms Serame said in July this year, the BMC approached government with a request for financial assistance in undertaking reforms through the Meriting Growth Strategy, which government approved through a presidential directive issued on August 1.

The support approved included P120 million public debt service fund loan which government had already disbursed to the BMC, as well as the P300 government guarantee presented before Parliament.

Urging fellow legislators to support the bill, the Minister of Agriculture, Mr Fidelis Molao explained that the P300 million would not leave the public fiscus but was rather a guarantee that would allow the BMC to continue with its loan agreement with the private bank.

The funds would only be released in the unlikely event of the BMC defaulting on its payment, Mr Molao said.

The BMC was working on improving its services, and when local cattle producers are able to regularly sell to the BMC at a good price, it would reduce the need for them to sell to South Africa and other neighbouring states, he added.

Ngami Member of Parliament (MP), Mr Carter Hikuama said government should rather be concerned about curbing the financial wastage and leakage that takes place in public institutions and state owned enterprises.

Mr Hikuama said the BMC should transform the way it operates, seek other markets other than the European Union (EU) and invest in the cattle industry value chain.

Supporting the motion, Nata/Gweta MP Mr Paulson Majaga said the Ministry of Agriculture needed more financial support to invest in the revival of the livestock sector as well as crop production and called for the next budget to start the process of providing funds to ensure Botswana had a solid agricultural sector. ENDs