Wesbank

Millions stolen from Govt levies

SHARE   |   Tuesday, 08 May 2018   |   By Phillimon Mmeso
Millions stolen from Govt levies

     Alcohol levy not used for its intended purpose

     BTO uses P314,000 from the special funds to purchase 23 tablets and pens

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     P4.8 million missing from the Cattle Export Levy Fund

     P60 million from NPF paid to Basis Point without following right procedure

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     It was act of criminality – former Energy PS

Cabinet has been advised to move some of the controversial levies – also known as special funds – set up by former President Ian Khama to Bank of Botswana under Consolidated Funds to curb the looting that was recently uncovered.

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One such special fund is the Alcohol Levy; and the Ministry of Finance and Development Planning has requested Cabinet to move it to consolidated funds after it emerged that since inception it has never been used for its intended purpose, highly placed sources at the Government enclave have revealed.

Appearing before the Public Accounts Committee (PAC) on Wednesday Permanent Secretary in the Ministry of Finance, Solomon Sekwakwa, said they have written to Cabinet to consider reviewing some of the special funds and transferring them to Consolidated Funds.

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Asked by PAC Chairman Dithapelo Keorapetse if the Alcohol Levy is one of the levies which are abused, the outspoken Sekwakwa laughed off before declining to comment on the issue. He said the ministry is still awaiting a response from Cabinet on the proposal to review some of the special funds.

Sekwakwa said they have developed systems at the ministry on how to block the abuse of special funds. “If cabinet refuses to heed to our first request we will then move to the second stage of checking how the funds are used and whether they are used for the intended purpose. If it is not the case, we will raise the red flag,” he informed the PAC.

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The Alcohol levy, which was started by President Khama in 2008, was meant to address the abuse of alcohol by setting up rehabilitation facilities around the country. This has not happened. Instead the funds were varied and used to supplement budgets for various ministries without consulting the committee set up to manage the use of the funds.

In 2012 the Auditor General raised a red flag, stating that funds from the Alcohol Levy were used to supplement budgetary provisions approved by Parliament for departments of the Ministry of Youth, Sport and Culture. Funds from the Alcohol levy were also used to cover normal expenditures of departments for which appropriations were made or should have been made from the Consolidated Funds. In the same year P30 million was used to purchase supplies from Central Medical Stores (CMS), despite the Ministry of Health having requested the funds for anti-alcohol campaigns.

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Easy money

Levies have proven to be easy money which was looted by Government officials in collaboration with unscrupulous businesses, despite numerous warnings about the danger of setting up many such levies. The Khama administration disregarded the warning from financial experts and threw caution to the wind.

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In an interview recently on his take on the impact of Alcohol Levy and whether it has served its purpose, President Mokgweetsi Masisi said they need to have a dialogue with the nation on the abuse of alcohol.

He said the levy has done its part but there is need for dialogue, especially with the youth. The levy was introduced without consultation with the nation; hence the Minister responsible at that time, Neo Moroka, when asked about the levy in 2008 said maybe Khama was just joking as no consultation had been done. The minister had a rude awakening when Khama ordered its implementation setting the levy at 30% that had negative repercussions on the whole alcohol industry leading to massive job losses due to retrenchments.

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Sekwakwa revealed that they have long warned Government about the creation of many levies and warned that something will crack. He said they recently transferred two levies to the Consolidated funds being the National Petroleum Fund (NPF) and the Tourism Industry Training Fund (TITF) which were being used for purposes they were never intended.

TITF collects levy from tourist establishment intended for skills training for citizens. However, the Auditor General has found that P10 million and P600, 000 was withdrawn in the 2016/17 financial year as loans to Botswana Tourism Organisation (BTO) and the Ministry of Wildlife and Tourism respectively. Another P314, 000 was also withdrawn from the fund to buy 23 tablets and pens for the 23 members of the TITF management committee.

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Another fund which has been used to syphon funds is the Road Traffic Fines Fund where P3.5 million was withdrawn to procure five Land Rovers to patrol the Central Kalahari Game Reserve (CKGR). The Cattle Export Levy Fund is another fund moved to Bank of Botswana’s Consolidated Funds after vouchers for payments worth P4.8 million were missing out from the P6.9 million said to have been spent from the Fund.

NPF looting

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On the NPF, Sekwakwa informed the committee that one of their departments – the Financial Intelligence Agency – raised a red flag and started investigating the fund. “There were many companies involved in the NPF transactions some which we don’t know about and some accounts don’t appear on the audited reports,” he said.

Former Permanent Secretary in the Ministry of Minerals, Energy and Water Resources Kgomotso Abi has described the transfer of P60 million from the NPF account at Stanbic Bank to Bank Gaborone as an act of criminality. Appearing before the PAC, Abi said he was not aware that former Department of Energy Director Kenneth Kerekang opened an account with Bank Gaborone alone as that is not permissible. “There are lot of processes involved before one can open a government account with a local bank. That cannot be done just by one letter. There has to be a resolution from the NPF management committee and you can’t have one signatory to the account,” he said.

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According to the documents before PAC, Kerekang opened the account and authorised the transfer of P60 million from NPF‘s Stanbic Bank Account to the Bank Gaborone account. Firstly, P10 million was transferred to Basis Point account as an advancement for the purchase of Botswana Oil products. A few days later Kerekang transferred P6 million from the account to Basis Point for consultancy services.

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Six months later, Kerekang wrote a letter to Bank Gaborone to close the account and transfer the remaining balance to a Basis Point Account. Abi agreed with PAC member Mephato Reatile that this was an act of criminality as no invoices were raised before payments were made. “There was also supposed to have been a requisition form that was to be filled for the transfer of funds and clearly such form was not filled,” he said.



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