THE MURKY SACKING OF BAMB CEO
A man who almost overnight turned the fortunes of an organisation close to farmers and their families countrywide has been shown the exit door while a board member of longstanding has added going against the current to fire Leonard Morakaladi to her allegedly chequered corporate history is still holding sway at BAMB.
At the beginning of 2018, Botswana Agricultural Marketing Board (BAMB) appointed Leonard Morakaladi as its new Chief Executive Officer. At the time of his appointment, BAMB was a mess.
It was characterised by stock theft that was costing the board millions of pula. The board was also generally underperforming and registered millions of pula in losses as well.
Morakaladi was determined to turn the board around. He called press conferences during his first few months in the job where he outlined his plans to turn BAMB around. Sometime in June 2018, then with only three months at the helm, Morakaladi announced in a press conference that he had tightened security at BAMB after a discovery that over P10 million was lost in stock theft and illegal stocking of substandard grain.
It was at that press briefing where Morakaladi admitted that indeed BAMB was going through a challenging phase, hence the need to step up security to avoid further theft. Before he took over, several senior officials at BAMB had left after it was discovered through an accounting query that there was stock shortage at various depots across the country amounting to P10 million, a challenge that Morakaladi addressed swiftly.
His mission was not only targeted at stock theft and corrupt stocking of substandard grain but also focused on the financial performance and succeeded in turning it around. Morakaladi took over an unprofitable BAMB. In a previous interview, he noted that he would focus on financial efficiencies and strengthening customer relations.
A year after he took over, BAMB grew its revenue by 16 percent from P269 million in the previous year to P312 million in 2019. Based on its current performance, BAMB projects its 2020 revenue to increase by a further 29 percent to P401 million, representing a 49 percent year-on-year growth, thanks to Morakaladi and his business acumen.
“We have worked very hard to improve relations with key customers and intensify marketing strategies,” he said in that previous interview. “Our aim is to continue expanding our footprint by contracting more farmers and becoming more customer-centric. That’s the only way to consolidate our value chain and improve overall business performance.”
BAMB was established by the BAMB Act CAP 74:06 of 1974 and mandated with providing a market for locally grown scheduled crops such as cereals, beans and oilseeds. It was also tasked with ensuring that adequate supplies exist for sale to customers at affordable prices. The BAMB Act empowers its creature to set prices for purchase or sale of agricultural produce, import and/or export any scheduled produce, arrange for transport, storage, processing and sale of produce, as well as purchase or obtain supplies for use in agricultural production.
At BAMB, they buy, package, process and sell locally grown produce such as cereals, cowpeas, beans and oilseeds. BAMB is also in the business of processing, as it sells processed foods like mosutlhane and ntlatlawane. For more than 20 years, BAMB has been contracted by the government to manage and maintain Strategic Grain Reserves (SGR) for purposes of national food security. In 2019, BAMB held 30,000 metric tonnes of sorghum, 2,000Mt of pulses and zero maize reserves against a target of 30,000Mt of sorghum, 30,000Mt of maize and 10,000Mt of beans.
Before his dismissal, Morakaladi had indicated that the shortages that exist at the SGR prove that there is a huge opportunity in crop production and urged farmers to produce more food to satisfy local demand and substitute large food imports. He was on a quest to rope in more farmers and encourage increased production. Under his captaincy, SGR management fees, which contribute five percent to BAMB’s revenue, were above budget by 114 percent in 2019. The management fees are expected to increase even more in 2020 on the back of increased grain purchases occasioned by bumper harvests this year.
“Because we have been blessed with a good harvest this year, we expect total grain purchases to increase by 118 percent, which will translate into a 167 percent increase in pay-outs from P160 million last year to P398 million in 2020,” he said in that momentous previous interview. “We have already breached the P50-million mark but we are not even halfway through this year’s harvest.”
During the 2018/2019 harvesting season, BAMB purchased close to 29,000 Mt of sorghum. In 2020, it anticipates a 41 percent increase in sorghum purchases on the back of this year’s bumper harvests. Maize purchases are projected to increase 902 percent in 2020 while pulse purchases are expected to increase 430 percent, still because of this year’s good harvests. “We expect to purchase a historic 30,000Mt of maize from local producers this year,” said Morakaladi in the interview before he was dismissed.
Led by Morakaladi, BAMB had also made headway in promoting smart farming in Botswana, employing use of drones to control pest birds. By using drone technology, BAMB was able to reduce bird infestation by 40 percent, which greatly alleviated crop losses.
Research also shows that farmers can equip drones with cameras to enable them to detect pest outbreaks early and employ appropriate treatment and management interventions.
BAMB has also increased support to small scale farmers, even going to the extent of offering them the same prices offered to contracted farmers. However, Morakaladi warned that small scale farmers would not enjoy such prices in future if they did not sign contracts with BAMB. Through strategic partnerships with agro-centric organisations like the Citizen Entrepreneurial Development Agency (CEDA), Botswana Meat Commission (BMC), Botswana University of Agriculture and Natural Resources (BUAN), National Development Bank (NDB) and Flo-Tek, BAMB hoped to increase the production capacity of small scale farmers by facilitating access to top-notch technology and financial assistance in another initiative of Morakaladi’s.
The deposed CEO was of the belief that the only way to ensure food security in Botswana was by emphasising on output. He believed that government has to get return on investment from its subsidies. In the past, BAMB used to uptake grain worth P160 million from P500 million worth of subsidies, which he believed was not sustainable.
He wanted BAMB to be able to guarantee government a return of P1billion from an investment of P500 million.
As a way of further reducing Botswana’s dependency on food imports, Morakaladi was focused on revolutionising the horticulture sector and encouraging Batswana to partake in the sector’s whole value chain. Through its Project Tsosoloso 2024, BAMB intended to set up a hatchery, build an animal feed mill and introduce a mobile soil testing laboratory. The animal feed mill was aimed at reducing importation of animal feeds while the hatchery was to meet demand for day-old chicks and support small-scale farmers who have ventured into poultry. The soil testing laboratory was to help farmers improve their production by making them aware of the health of their soil and how to improve it.
MORAKALADI’S UNCEREMONIAL SACKING
But Morakaladi’s excellent performance at BAMB failed to secure his job. Infact, according to those in the know, clandestine meetings at BAMB to undermine management progress have a bearing on his sacking. They point to an alleged deliberate decision by the Acting Board Chairperson at BAMB, Ruth Mphathi, to get rid of Morakaladi. She has been a board member for seven years. The Business Weekly & Review has seen a letter dated 24 February 2021 through which Mphathi warned Morakaladi that his contract is ending on 28 February even thought it was still left with two more years.
Mphathi threatened not to renew Morakaladi’s employment contract regardless of his outstanding success at making BAMB profitable against losses seen during the past seven years during which Mphathi was a board member. Morakaladi’s strategic reform decisions are alleged to have rubbed the Acting Chairperson the wrong way. The man was shown the door inspite of a decision by BAMB’s Human Resources Committee recommending extension of his contract.
A letter dated 8 October 2019, Ref 4.3 274 C 1(26), addressed to the then BAMB Board Chairperson, authored by Gone Madisa-Kgwarae recommended for a review of employment of the fixed term contract for a CEO on a contract of employment from 3 years to 5 years which would increase the duration of his employment contract.
The then Chairperson of the Board, Dr Gloria Somolekae, wrote a letter on 19 November 2019 informing the current CEO that the BAMB Board of Directors had extended his contract.
“This letter serves to inform you that BAMB Board of directors has amended your contract of employment from three years to five years contract as per Revised BAMB conditions of service clause 3.8.1,” the letter read.
In her response to this publication’s inquiry, Mpathi said; “I can confirm that Mr Morakaladi’s contract has come to term. I cannot share the reasons for non-renewal at this time. The board is in the process of establishing the efficacy of certain issues raised within the organization and if deemed appropriate, the outcomes will be shares accordingly with the relevant stakeholders.”
Regarding her relationship with Morakaladi, which is alleged to have been beyond redemption, she said she was unaware of that.
Nevertheless, the man who turned the fortunes of an organisation close to farmers and their families countrywide is no longer with it while a board member of longstanding who has added going against the current to fire Morakaladi to her chequered history is still holding sway at BAMB.