As Botswana Housing Corporation (BHC) officially introduced new prices for its units this week, they did so on the backdrop of being owed P27 million in rental arrears.
As of 1st April, BHC tenants saw a hike in their rentals as the Corporation enforced an increase for the first time in 16 years.
Confirming they are owed millions, speaking to Voice Money this week, BHC Head of Marketing and Communication, Gomolemo Zimona revealed that as of the end of February the figure stood at a whopping P27 million.
However, he refused to go into detail on the debt.
“We are not at liberty to disclose arrears of any party to our agreement with the media,” explained Zimona.
In terms of BHC tenant composition, government accounts for 45.20 percent of BHC’s 9, 887 units as it rents 4, 469 units.
Individuals account for 27.45 percent of BHC houses (or 2, 714 units) closely followed by companies and local authorities at 27.35 percent (2, 704 units).
On what measures the Corporation is taking to recover the money owed to it, Zimona revealed BHC has processes guided by its internal policies and lease agreements.
“In terms of initiatives adopted by the Corporation to ensure collection of arrears, we have a collection process guided by our internal policies as well the lease agreement signed with its tenants,” he highlighted.
Zimona added that BHC has and will continue to use this process to collect the arrears and ensure they are cleared.
Although the increase in rentals may seem steep, the Corporation remains confident there will be no mass exodus of clients from its houses.
This is because, despite the increase, BHC believes its rentals are still below the market rate and as such does not envisage a situation where people vacate its houses for those with higher rental prices.
Last year, the Corporation reported a profit after tax of P5.3 million for the six-month period ended 30 September 2020.
This was a drop of P12.1 million, from P17.4 million registered during the corresponding period in 2019.
BHC’s Chief Executive Officer (CEO) Reginald Motswaiso blamed the lower margins on poor sales in areas away from the organisation’s major markets of Gaborone and Francistown.
The drop in profits was also attributed to lockdowns imposed by the government to control the spread of Covid-19, which resulted in low activity at BHC’s contraction sites.