It is becoming increasingly important for members of the public to critically examine the way BPOPF is managing government employee pension funds. As our government has embarked on privitisation of state assets, there is need for members of the public to take active interest in the affairs of the private sector. This is necessary as the private sector does not always act in the best interest of government. In fact looking at the Enron Debacle, it will be a serious oversight on the side of government to trust that the private sector can protect public interest. There is a strong case for state intervention regarding the management of BPOPF. We agree that under normal circumstances, the private sector including public comspanies should strictly adhere to the highest corporate governance. But the reality on the ground is that both private and public companies often find themselves entangled in conflicts of interests. Companies will always take advantage of opportunities as they avail themselves. This may be done even without taking into account clearly laid down procedures and regulations. Companies may exploit loopholes to profit from state assets. The major problem is not really the dangers of insider trading and breach of Companies' Act. Neither does the blame falls squarely on Botswana Stock Exchange for failing to supervise public companies. In addition, the public cannot turn to the registrar of companies for failure to enforce the provisions of the Companies' Act as far as minority interests are concerned. It is a normal practice for those in the private sector to form consortiums to take advantage of loopholes as and when opportunities arise. The voters should look at their government failure to protect pensioners. It is the role of the Ministry of Finance to ensure that government employees pension fund is protected and managed in the most transparent manner. In fact, even Bank of Botswana must have vested interest in the affairs of Botswana Public Officers Pension Fund. In the absence of proper supervision from financial watchdogs, directors of public and private companies will do as they wish without considering public interest. In fact it will not be surprising if one day we wake up to realise that corporate Botswana is lining its pockets with government assets. This may happen just under our watch! Why BPOPF is always a target? One may ask.
The Direct answer is that BPOPF is the richest Fund in Botswana involving billions of Pula. The fund was established around 2001 to cushion government employees from poverty trap. This is the only consolation that make government officials to retire in dignity. This is the fund that was set under President Mogae and we will remember his legacy for empowering the then underpaid government officials. Taxpayers' money and diamond revenue was used to set up government employees pension fund. We ought to appreciate that it is because of this fund that even ordinary government officials working in government enclave are able to retire wealthy and some of them millonaires! However, there is a strong suspicion, perceived or real, that the government employees pension fund may be going through challenges. However, it is the root cause of the problem that is not being addressed that gets me worried. The problem here is not with the trustees of the government pension fund. The problem is with asset managers who are investing the government pension fund on behalf of the trustees. Why the Ministry of Finance and Bank of Botswana decided to place such a sensitive fund in the hands of the private sector boggles the mind. Is it because of privatisation? One does not need to be a genius to diagnose the problem. The problem is that government enclave for reasons known to itself felt the private sector in Botswana has grown and matured to the extent that it can be trusted with government employees pension. This is the mistake government may one day regret. It is very dangerous to speculate with billions of government revenue let alone pension funds particularly in a country where government is the largest employer. My advice to government enclave, Ministry of Finance and bank of Botswana is that when it comes to pension fund they need to pursue tried and tested models. In my opinion, the way South African government manages its employee pension fund is excellent. My advice is that the Ministry of Finance should follow the South African model regarding the management of government pension. SA government besides being a capitalist state, and for that matter a more successful free market economy than Botswana, had never trusted the private sector to manage government employees fund. SA government established a government controlled entity to manage the pension fund in public interest. SA pension fund has Public Investment Corporation as its asset managers. This corporation was established through an Act of parliament to invest government employees pension on behalf of the pension fund. The trustees are mainly administrators. In Botswana, we have it upside down where government enclave hopes private sector can protect government interests. There is no way private sector can act in the best interests of government employees. This misconception may one day cost the taxpayer and government employees lots of money. Private sector does not operate in that manner. Private sector will want to pursue their own interests and may come up with consortiums to enrich directors.
