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CEMAEF reproduces 2006 audit – Auditor General

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Government founded Citizen Entrepreneur Mortgage Assistance Equity Fund (CEMAEF) was established as one of the policies and programmes customarily aimed at promoting citizen participation in the mainstream economy. However, according to the Auditor General’s report of 2012, the organisation has not had an update of its results for the last six years and has been reproducing the 2006 audit report.

According to the Ministry of Finance and Development Planning (MFDP), CEMAEF has assisted 45 citizen individuals and wholly citizen owned companies with an amount totalling P83, 493, 226.00 since its inception.

 

However, the Auditor General’s (AG) Report of 2012 noted that the submission of the audited accounts of the Fund to the Accountant General for incorporation into the Annual Statements of Accounts has over the years been a source of concern, despite repeated adverse comments in the AG reports and those of the Public Accounts Committee.  The continued failure by the Board of Trustees to submit these accounts resulted in the Committee not being apprised of the activities of the Fund as well as being denied the opportunity to examine the accounts. “While I have not been advised of the latest position on the merger of the Fund into the operations of CEDA, I am however, aware that the situation regarding the submission of accounts had not improved in the year under review. The latest accounts included in this statement are a reproduction of those that were last submitted in 2007/08 in respect of financial year that ended on the 31st March, 2006,” stated the report.

 

Given a background of its history, Gazette Business has learnt that CEMAEF was established to mitigate the process whereby citizen investments in commercial/industrial properties and land facing foreclosures by the lending institutions were easily acquired by non-citizens. If citizen investments were facing foreclosures, CEMAEF would step in, after application, to buy equity in such businesses, provided that they met the investment criteria of the Fund. The main objective of CEMAEF was to protect ownership of properties in Botswana and maintain it in the hands of citizens. CEMAEF was managed through a Board of Trustees.

In establishing its existence, Gazette Business has found out that in 2008, government decided that CEMAEF, being an economic empowerment scheme, should be placed under CEDA management.

 

The Ministry’s Director of Human Resource Planning and Enterprise Development, Stanley Makosha told Gazette Business that “to-date, the scheme is administered by CEDA as one of its products. The Ministries of Finance and that of Trade and Industry have been working towards transferring all CEMAEF projects, assets and liabilities to CEDA. All projects have been bought back by the original shareholders i.e. government equity in the assisted projects has been sold to the assisted parties.”  In addition, he said, some of the assisted parties were provided with CEDA loan facilities to purchase back the government equity. Furthermore, CEMAEF Trust was dissolved through a Notarial Deed of Cancellation on the 25th February, 2013.

 

Meanwhile, CEDA has indicated that it has not been incorporated with the CEMAEF Trust, but the format of the handover was for the operations of the Trust to be taken over by CEDA.

 

CEDA spokesperson, Anno Tshipa said since the operations were handed over to them, they have been audited as part of the CEDA products and services, and duly reported in the Annual Reports. “To this end, all new applications are directed to CEDA and have been assisted through the various products available at the Agency. Under this Trust, 15 projects were assisted at a cost of P17 million since 2009,” she added.

 

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