Are Botswana's presidents beacons of good governance?

The temptation of turning political power to personal advantage is a test of democratic leadership the world over. In this article for South Africa's Mail & Guardian newspaper, Ntibinyane Ntibinyane (whose internship was funded by OSISA) looks at the record of three Presidents of Botswana – often held up as beacons of good governance.

President Ian Khama (2008-present)

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Strategic communications for WWF

August 22nd, 2011

The temptation of turning political power to personal advantage is a test of democratic leadership the world over. In this article for South Africa's Mail & Guardian newspaper, Ntibinyane Ntibinyane (whose internship was funded by OSISA) looks at the record of three Presidents of Botswana – often held up as beacons of good governance.

President Ian Khama (2008-present)

President Ian Khama has interest in a premium tourism company that benefitted from the controversial relocation of Botswana’s Bushmen from their ancestral land to resettlement camps in the 1990s and the early 2000s. President Khama is a shareholder in Linyanti Investments, a subsidiary of Wilderness Holdings – a company criticised by the Bushmen and international pressure group Survival International for illegally occupying their ancestral land in the Central Kalahari Game Reserve (CKGR).

Wilderness Holdings spokesperson Julia Swanepoel confirmed that Khama held a stake in Linyanti Investments: “He is not a [direct] shareholder of Wilderness Holdings. He does, however, own a 5% stake in Linyanti Investments, the owner of the Linyanti Concession,” she told the Mail & Guardian (M&G). The Linyanti Concession covers 1,250km of the northern Kalahari in the Chobe District. Wilderness Holdings was listed on the Botswana and the Johannesburg stock exchanges in 2010.

According to Wilderness Holdings, Khama purchased the shares “at a market related price” on the 8th October 2002. He was then vice president of Botswana. Swanepoel further stressed that, “the company (Wilderness Holdings) does not own Linyanti but rather the [Linyanti] concession. We have recently renewed our concession until 31 December 2025,” she said.

In addition the M&G has established that two directors with close ties to the president currently sit on Wilderness Holdings Board. Khama’s nephew, Marcus Patrick Khama ter Haar, and the President’s personal lawyer, Parks Baedzi Tafa, were both appointed directors on the 14th January 2010. They are not shareholders in the company.

A source close to Khama’s government told the M&G the appointment of the two men was not coincidence. Defending the inclusion of Tafa and Ter Haar, Swanepoel stated, “Marcus ter Haar is an independent non-executive director as defined by King III and therefore does not represent any shareholder. Parks [Tafa] is not classified as independent, although he is a non-executive as the legal firm that he works for, Collins Newman, also provide legal services to the company. He does not represent any shareholder.” She said the two were appointed to the Wilderness board based on their qualifications and merits.

For more than two decades now, the Botswana government has been locked in a bitter battle with the Bushmen over the government decision to forcibly relocate them from the Central Kalahari Game Reserve. The government’s contention over the years has been that the place is designated for wildlife. With the aid of international organisations, the Bushmen challenged the government’s decision to evict them from their ancestral land. In 2006 Botswana High court ruled in their favour. Two years after the landmark judgement, in 2008, Wilderness Holdings entered into a lease agreement with the Botswana government to set up a lodge within CKGR, a decision that angered the Bushmen.

The company currently runs a lodge and an airstrip in the area. The Bushmen’s main argument was that the lease (between Government and Wilderness Holdings) made no provisions for the rights of the Bushmen whose ancestral land is now used by Wilderness Holdings. They also complain that they were not consulted prior to setting up the tourism venture. The Bushmen, through Survival International, have since called for tourists and investors to boycott Wilderness Holdings.

“While the Bushmen are denied food and water, the government is promoting tourism to the reserve –Wilderness Safaris has opened a luxury tourist lodge… While Bushmen nearby struggle to find enough water to survive on their lands, guests can sip cocktails by the camp’s swimming pool,” read a statement by Survival International.

According to the Bushmen, the government has done everything it can to make their return impossible, including banning them from accessing a water borehole which they used before they were evicted, while at the same time allowing Wilderness to build a pool. “There is nothing more painful than to see a swimming pool near us in the desert where people can swim while we ourselves don't have any water,” commented Jumanda Gakelebone, the Bushmen’s spokesperson.

However, in January this year, the Bushmen won a case in which they challenged the government’s decision to deny them use of the borehole. The judges described the Bushmen’s plight as “a harrowing story of human suffering and despair.” Approached for comment, President Khama’s spokesperson Dr Jeff Ramsay said Khama had declared his interest to the then president Festus Mogae after acquiring the shares in Linyanti Investments.
He continued, “I can confirm that Cabinet members, including Presidents, routinely recuse themselves whenever a matter comes before Cabinet in which they might reasonably be understood to have a personal interest, whether it is via shares in a company or a relative or business associate.”

Pressed on whether the president has recused himself from cabinet meetings dealing with the Bushmen relocation from CKGR, Ramsay refused to go into specifics. Responding to suggestions that Khama may have influenced the awarding of tourism licences to Wilderness Holdings, Dr Ramsay responded that concessions are not awarded by Cabinet but rather by open tendering processes and community based management systems. “There is thus no conflict of interest between the President’s official duties and private business interests in this or other matters,” he said.

Calls by the Bushmen and Survival International for investors to shun Wilderness Holdings seem to have fallen on deaf ears. According to the April 2011 Wilderness Holdings share register, prominent figures in the country have bought thousands of shares in the company ever since it listed in Botswana and Johannesburg stock exchanges. The list of shareholders includes the Who’s Who of Botswana politics and business. One surprise shareholder is senior Judge of the High Court, Mpaphi Passevil Phumaphi, who has 15,000 shares in the company. In 2006 Phumaphi was part of a three-judge panel that ruled that the forced removal of the Bushmen from their ancestral land was unlawful and unconstitutional. He ruled then that the government’s refusal to allow the Bushmen to hunt “was tantamount to condemning the residents of the CKGR to death by starvation”.

Lebang Mogaetsho Mpotokwane, a former top civil servant and the current convener of opposition cooperation talks in the country, has 40 000 shares in the company. Mpotokwane is a successful businessman. Former Botswana Congress Party (BCP) president Gilson Saleshando also invested in the company. He has 5000 shares in the company. Saleshando’s party has been a fierce critic of the government’s decision to remove the Bushmen.
Saleshando’s wife Professor Lydia Saleshando - deputy vice chancellor of the University of Botswana - has 1000 shares in the company. Professor Saleshando is well known for being an advocate for the minority tribes in Botswana.

Former Minister in the office of the president and now Botswana’s top diplomat in India Lesego Motsumi has 300 shares in the company. Motsumi was deployed to India by president Khama in February this year. According to the share register, Botswana Public Officers Fund – a pension fund for civil servants – has 950 000 shares in the company. Bank of Botswana Staff Pension Fund has 170 000 shares in the company.

Modiri Mbaakanyi, immediate past president of Botswana Confederation of Commerce Industry and Manpower – an organisation that represent the interests of the business industry in Botswana, has 20 000 shares in the company. Other shareholders are, Balisi Mohumi Bonyongo Debswana Jwaneng mine general manager, Richard Mannathoko, former CEO of Botswana Meat Commission, Masego Marobela and the Managing Director of Botswana Bureau of Standards. Mpho Balopi, a ruling Botswana Democratic Party (BDP) politician.

Festus Mogae (1998-2008)

Four months after his term came to an end, former Botswana president Festus Mogae was appointed a director at Jonah Capital (PTY) Ltd - a company that was awarded five coal prospecting licences through its subsidiary Asenjo Energy by Mogae’s administration few months before Mogae left office.

Asenjo Energy’s assets include six tenements in Botswana with a total prospecting area of approximately 2 600km2 containing estimated resources of 10.7 billion tonnes of coal. Jonah Capital is an investment company focusing mainly on mining in Africa. The company is led by Ghanaian entrepreneur, Sam Jonah. Mogae dismissed any suggestion that his influence may have helped Asenjo Energy win the five prospecting licences in 2007. He said he was completely in the dark at the time about links between Asenjo and Jonah Capital: “Again the cabinet does not issue prospecting licences but the Ministry of Energy, Minerals and Water Resources,” he said.

Asenjo Energy is a joint venture between Jonah Capital, Sintula Mining and Aquila Resources. Jonah Capital has a 50% stake in the company. It is not clear whether Mogae and Sam Jonah had a personal relationship before the awarding of the prospecting licences but sometime in June 2007 Jonah was invited by University of Botswana to give a keynote address at the UB Foundation Dinner in Gaborone.

Mogae, who was then the UB Chancellor, shared a table with Jonah. Sources told the M&G that Mogae and Jonah have been personal friends for many years. Amongst the directors of Jonah Capital include most of Sam Jonah’s family members and former SADC executive secretary and Zimbabwean Finance Minister Simbarashe Makoni. Mogae told the M&G that he resigned from the company last year in November, but stressed that he finds nothing unethical in joining the company immediately after leaving the presidency.

He said that prior to joining the company as a director he was not aware that Jonah Capital had interests in Asenjo Energy. “Even if I had known I would still have joined the company because I strongly believe the company has the interests of people of Botswana at heart. It interests me to see companies coming to my country to create jobs and playing a role in the development of the country. Yes, maybe there are people who would question the timing of my appointment as the director of the company, but my conscience is clear. I am happy that I was associated with the company,” said the 72-year-old Mogae.

He added that there are over 800 prospecting licences in Botswana that have been awarded to various companies and as such it was difficult for him to have known that Asenjo Energy has been awarded a prospecting licence by his government. On his relationship with Jonah Capital boss Sam Jonah, Mogae replied, “He is my hero. I got to know him many years ago through a friend here called (David) Magang, but I wouldn’t say we are best buddies, but we are more of fellow Africans who respect each other,” said Mogae.

Sir Ketumile Masire (1980-1998)

Since leaving the presidency in 1998 former president Sir Ketumile Masire has been director of Global Afrika Resources and Energy Corporation (GAREK) – a company mired in controversy over the fate of millions of Rands of investors’ funds.

According to its 2005 company profile GAREK, is a conglomerate that invests across various sectors such as energy, environmental technology, resources and financial services. The company invited people to invest in it by buying shares that would later turn out to be virtually worthless. Since its inception in 1999, GAREK and its subsidiaries have taken millions of Rand from more than 2000 investors in South Africa. Masire was appointed GAREK non-executive chairman on the 16th May 2004, but prior to that he chaired other subsidiaries owned by GAREK. In fact between 2002 and 2005, Masire joined at least eight companies associated with GAREK as director.

GAREK and most of its subsidiaries are deregistered. Only Global Energy Corporation (a GAREK subsidiary) is still in business, according to South African company registration records.

Global Energy Corporation like other GAREK subsidiaries still lists Masire, as one of the directors and Masire appears to have benefited handsomely from this association. Following complaints by shareholders, then SA Minister of Trade and Industry Mandisi Mphalwa appointed a team of inspectors to investigate the affairs of GAREK and other associated companies.

The other companies investigated were Resourcefin Strategies International Limited (RSI), Mwamko Afrika Trade Resource Industrial and Commerce Corporation Limited MATRIC), Independent Holdings Limited (IHL), Appropriate Structures in Emerging Markets Limited (ASEM) and Holistic Resources Limited (HRL).

The hard-hitting report of Department of Trade and Industry (DTI) inspectors was finally published in 2009. According to the report, a total of R74 m was received from investors. Of this amount R24 m was paid to directors and a further R16 m was paid to brokers who peddled the shares.

Other findings included:
A large portion of investors' funds was not applied to acquire assets as represented to shareholders, but used for operational expenses and commissions paid to directors or key individuals; and

Payments were made to entities (considered investments) where no substantiated value could be established, including entities about to go into liquidation.

Among the conclusions: “It is… recommended by the inspectors that the minister release the report for consideration of possible criminal prosecution of directors and officers of RSI, MATRIC and GAREK and possible recovery of investors funds by the National Prosecuting Authority (NPA).”

According to the DTI report, Masire played a significant role in the company. He certainly benefited financially. According to the report, Masire received R1 009 576.10 between 2002 and 2006 from Garek and linked companies. The amount could be higher as it does not include expenses such as travel and food.
In an interview with the M&G, Masire claimed he was played for a fool by the directors of GAREK and the company merely used him to boost its profile. But this was not always his attitude. In 2005, when Moneyweb carried a series of critical articles on the company, Masire threatened to sue. In a letter dated 11 April 2005 Masire scolded the publication and its reporter – and fully backed GAREK.

“...I will not dignify the type of journalism practised by your organisation with any form of response to any aspect of such publications. Suffice it to say that GAREK… may have or may in future, suffer damages resulting from your publications, which damages maybe claimed from you…"

“As chairman of GAREK, I and my independent personal staff and advisors are satisfied that GAREK is neither ‘conning its shareholders’ nor ‘displaying a blatant disregard for Companies Act’.”

When the damning report was released in 2009 the investigators recommended prosecutions be considered. Three years later nothing seems to have been done. National Prosecuting Authority (NPA) spokesperson Mthunzi Mhaga told M&G that the prosecuting authority has not carried out any investigation of GAREK or its directors. A source close to DTI told the M&G: “It could be that this involves a former president of another country and that the SA government does not want to embarrass [him].” For more than two months, DTI failed to answer questions from M&G regarding any possible action against GAREK directors.

Some of the GAREK directors and officers have questionable backgrounds. For example Ronald Creasy and Andrew Cecil are associated with now deregistered Amalia Gold Corporation – a company that has been accused by the United Nations of having played a role in the Liberian civil war and involvement in blood diamonds in the 1990s and late 2000s. During his time with GAREK, Masire may have shared a table with characters dripping with blood in their hands.

According to the DTI report Kevin Watson played an influential role of the company’s chief executive officer. The DTI report also identified Watson and Cecil as key figures at GAREK, arguing that all issues cited in the findings “...would have occurred on the basis of their direction or instruction”. Amalia is further accused of providing military training to the Revolutionary United Front. According to a 2009 report by Bench-Mark Foundation, an independent faith based organisation “GAREK is AMALIA risen from the Ashes”. Sam Jackson, another GAREK director has close ties with former Liberian strongman Charles Taylor. In fact Jackson was the finance minister under Taylor’s government.

Nsingo Kapembe, former Zambian diplomat and CEO of African Renaissance Institute with headquarters based in Gaborone, Botswana, appears as director of GAREK and most of its subsidiaries. Like Masire, Kapembe benefited a lot from GAREK ‘dirty dealings’. Another player is Lekoma Mothibatsela – a former advisor to former Botswana president Festus Mogae. Mothibatsela is listed as a director in GAREK and some of its subsidiaries. He has also allegedly pocketed thousands of Rands from GAREK.

Other directors and officers associated to GAREK, according to the DTI report and internal GAREK documents are Tony Illingworth, Jacubos Pretorious, Thomas Campbell, Carolyn Morning, Hamish Macpherson, Theresa Schjebel, Leon Talijaard, Hasso Wolfgang Kurt Schauer, Goerge Duncan Julyan, Alan Curtin, H Moosa, Mrs K Cecil, KJ Wolhuter, Peter Trickey and Michael Burke.

Masire is not new to controversy. Last year the Botswana media published secret De Beers’ files indicating that the diamond company bailed out the former president on numerous occasions when he was going through personal financial difficulties during his time in office (1981-1998). De Beers has since admitted to funding the former president’s debts – apparently to the tune of several million Rands.

Former Botswana President Sir Ketumile Masire now says that he deeply regrets being part of GAREK group of companies. He told the Mail & Guardian during his stint as the company’s non-executive chairperson he was not aware of the company’s dodgy dealings. “Sometime in the early 2005, we started receiving media reports that the company was ripping off shareholders of their funds. I approached other board members about this alleged practices but they denied the allegations [as] nothing but professional jealousy...”

He said the media continued reporting about unfair business practices by GAREK and this worried him even more and he resigned in June 2005. “The main reasons that led to my resignation from GAREK were unsettling stories I had begun to hear about GAREK. This worried me a lot and ultimately I decided to resign. I no longer wanted to be associated with the company,” he said.

Masire claims that throughout his stay at the company he wasn’t aware of any illegal dealings. “The mistake that I made was not to look more into the background of the company and the directors before joining it. I should have been more careful. I certainly deeply regret ever having been involved in GAREK and with its directors,” he said. When it was put to him that he still appears on CIPRO records as an active director, Masire responded: “No I am not aware that I am still listed as active GAREK director... If that is the case, then I strongly state that keeping my name as their director, long after I have resigned, is downright criminal.”

In his famed memoirs Very Brave or Foolish: Memoirs of an African Diplomat, published in 2008, Masire never mentioned anything about his involvement with GAREK or its subsidiaries. Asked whether the GAREK issue embarrassed him Masire replied, “Yes, I have mentioned nothing about GAREK in my memoirs. It is impossible to have all events of my life in the memoirs,” he said.

According to political analyst Thapelo Ndlovu, the business dealings of Botswana leaders past and present starkly highlight the need for a formal declaration of interests by political office bearers.
“For a long time Botswana leadership has been refusing to establish a law on declaration of assets and liabilities and this has compromised ethical cleanliness of our leaders and heightened suspicion of conflict of interest, and insider trading.”

Ntibinyane Ntibinyane produced this article during an internship with the M&G Centre for Investigative Journalism supported by a grant from the Open Society Initiative for Southern Africa.

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