03 Mar 2025

The Ministry of Minerals and Energy remains committed to upholding the integrity of the mining sector and ensuring that Citizen Economic Empowerment is not just a policy requirement but a reality that benefits all stakeholders.

Answering a question in Parliament last week, the minister Ms Bogolo  Kenewendo assured the house that the ministry would continue strengthening regulatory mechanisms, enhance transparency and holding companies accountable to foster a fair and inclusive mining sector.

On the issue of business fronting in the mining sector and its impact on citizen economic empowerment, Ms Kenewendo said the ministry was committed to ensuring that empowerment policies were implemented with integrity and transparency.

Ms Kenewendo said empowerment regulatory framework were designed for genuine citizen participation in the mining sector, ensuring that local businesses, entrepreneurs and communities benefited meaningfully from the industry. She said business fronting, where entities misrepresent ownership or control to meet local participation requirements was a direct violation of the principles and was undermining national economic objectives.

Through the Debswana Board representative, Ms Kenewendo said the ministry continued to provide the necessary line of oversight and guidance to ensure compliance with the important governance principles. She said Debswana had in place an appropriate governance framework necessary to address and prevent fronting practices.

While understanding that even the best systems cannot be foolproof, Ms Kenewendo said the assurance mechanisms employed enabled Debswana to identify and deal with policy violations as and when they emerged.

“Debswana has also been proactive in bringing about continuous business improvement initiatives that enhance their due diligence process in their supply chain management,” Ms Kenewendo said.

She said having observed other emerging fronting practices, the company appointed a consultant to combating fronting in their tender award processes. Additionally,  she said Debswana’s whistle blower mechanism allowed stakeholders, employees and the community to report suspected cases of fronting and other suspected transgressions.

She said in 2024, Debswana spent P5.39 billion on citizen companies which was 50 per cent of 2024 total Debswana procurement spent. Additionally, 37 per cent was on Botswana based non-citizen companies and 13 per cent on foreign based companies.

Minister Kenewendo said in January 2025, P574.6 million was spent on citizen companies, which was 55 per cent of that month’s expenditure, whilst 32 per cent was spent with Botswana based non-citizen companies, and 13 per cent on foreign based companies.

In early 2024, she said Debswana observed suspicious fronting incidents, adding three cases were verified as fronting. To date, she said 12 companies suspected and investigated, out of which six were confirmed to be fronting and blacklisted.

Ms Kenewendo said Debswana Citizen Economic Empowerment (CEEP) commenced in 2007 as a business development office within the supply chain department to open opportunities for citizens to participate in the Debswana supply chain.
She said the 2020-2024 target set was to achieve spending of P20 billion with citizen owned companies and support 20 000 jobs.

Over the recently ended strategy period (2020-2024), Ms Kenewendo said Debswana had spent P23.56 billion on citizen owned businesses. From the P23.56 billion, P8.78 billion was spent in Orapa, Letlhakane and Damtshaa Mines (OLDM), while P13.37 billion was spend at Jwaneng and P1.42 billion in Gaborone.

“A total of 3 116 suppliers are currently registered on Debswana database and out of this number 2 262 (73 per cent) are citizen suppliers. A total of 962 citizen companies benefited from Debswana procurement opportunities over the past five years with an average of 700 citizen companies transacting with the company annually,” said Minister Kenewendo.

Additionally, she said 200 companies benefited through various capacity development training and 145 suppliers benefited through access to finance facilitated by Debswana’s partnership with local financial institutions to ring fence P4.7 billion to fund Debswana citizen suppliers.

Ms Kenewendo said most of the suppliers provided services at both Jwaneng and OLDM, with the former having 536 and the latter 579 citizen suppliers utilised in 2024. Under local manufacturing support, Ms Kenewendo said Debswana aimed to create a market for locally manufactured products. She said the textile Personal Protective Equipment (PPE) supported 34 SMMEs.

“As the end of 2024, they received orders to the value of P34 million. These textile operators employ 700 people,” she said.

She said High Density Polyethylene, a company based in Taung and employed 50 people supplied Debswana with pipes to the value of P42 million. She Debswana purchased dust suppression chemicals valued at P27 million from a company that employed 30 people.

Mogoditshane East MP, Mr Letlhogonolo Barongwang, had asked the minister if  she was aware of alleged business fronting tendencies at Debswana Mining Company that frustrated Citizen Economic Empowerment Programme and to further brief the house on what the ministry was doing to address the issue. ENDS