The long-running controversy surrounding Bolux Group’s operations has resurfaced after the Ministry of Trade and Entrepreneurship admitted that key records relating to the company’s licence cannot be located, raising fresh questions about one of Botswana’s most contentious citizen economic empowerment issues.
Appearing before Parliament’s Public Accounts Committee (PAC) on Tuesday, Permanent Secretary Joel Ramaphoi disclosed that the Ministry’s file on Bolux is effectively empty, making it difficult to establish the basis on which the company was licensed to operate within a business activity reserved for citizen participation.
Ramaphoi told the Committee the matter predates his appointment, describing it as one of the unresolved issues he inherited upon assuming office in August last year. He said the Ministry has since sought legal advice to determine the most appropriate course of action and establish what transpired when the licence was issued.
“Their information is not available on the file, the file is empty, but they have a valid lisence issued by the Trade Ministry. We have since sought legal opinion on the best remedial approach to the issue. We hope to get a solution soon,” as he narrated to PAC members.
The issue was raised by Nkange Member of Parliament Mothaleemang Moalosi, who argued that Bolux’s dominance in the bread market has contributed to the closure of several citizen-owned bakeries. He questioned whether the company’s licence, which is reportedly due for renewal, remains consistent with Botswana’s citizen reservation policy and asked why Government had not intervened.
Responding, Ramaphoi said the matter is legally complex. He explained that Bolux was granted an industrial licence before the introduction of the citizen reservation scheme, meaning “the company was already operating before the current policy framework came into effect.”
The controversy is not new. Earlier this year in March, MP Mothaleemang Moalosi formally questioned the Minister of Trade and Entrepreneurship in Parliament, Tiroyaone Ntsima over whether competition laws permit Bolux to manufacture flour while simultaneously operating a bakery supplying wholesalers, retail chains and informal traders. He also asked what measures Government intended to take to protect citizen-owned bakeries from what he described as predatory pricing and market dominance.
He further noted that there is currently no legal provision allowing the Ministry to revoke the licence solely on the basis of market dominance, despite complaints from local bakeries. While acknowledging concerns over competition, he said Government must act within the confines of existing legislation.
PAC members questioned why the Ministry had not suspended the licence while investigations continue. However, Ramaphoi maintained that any decision must be guided by legal advice, particularly given the historical circumstances under which the licence was granted. The Permanent Secretary added that the Ministry is attempting to establish the conditions attached to the original licence, but this has been complicated by the absence of supporting records. He said officials are working to reconstruct the history of the matter before determining an appropriate remedy.
The controversy is not new. Earlier this year in March, MP Mothaleemang Moalosi formally questioned the Minister of Trade and Entrepreneurship in Parliament, Tiroyaone Ntsima over whether competition laws permit Bolux to manufacture flour while simultaneously operating a bakery supplying wholesalers, retail chains and informal traders. He also asked what measures Government intended to take to protect citizen-owned bakeries from what he described as predatory pricing and market dominance.
In his response, Ntsima acknowledged that indeed bakeries are under distress. “With regard to the competition laws, it has come out that there is nothing wrong in relation to competition. The Competition Authority has clearly stipulated that the Ministry is at fault by issuing this bakery licence to Bolux, which has led to this unprecedented consequence.”
It has been learnt that, Ministry issued Wheat Flour milling licence to Bolux in 2003. During this time Bolux had a model bakery to train customers how to bake products from their flour for maximum benefits. In 2010 Bolux amalgamated its companies under the Bolux Group. In 2017, Industrial Licensing Authority (ILA) received an application from Bolux Group (Pty) Ltd requesting the ILA Board to transfer the Model Bakery (Pty) Ltd bakery and confectionery license to Bolux Group Company. The ILA Board had no objection to the transfer, but was however, handicapped by section 27 (3) of the Industrial Development Act, which stipulates that transfer of a reserved activity to a foreign owned company is the prerogative of the Honourable Minister. Consequently, the request was referred to the Minister as per the law, in the process Bolux was given the license to operate a bakery.
This led to the company to be a player in two critical stages of the value chain. This then gave them a competitive edge over the bakeries and led to this unfair playing field we are faced with today.
Botswana’s citizen reservation framework reserves certain business activities, including bakeries, for citizen-owned enterprises as part of Government’s citizen economic empowerment policy. However, Government has previously acknowledged that some businesses continue operating under licences issued before the reservation regime came into effect, creating legal and regulatory complexities that continue to challenge policymakers.
