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The conundrum of State Owned Enterprises

Over the past 10 financial years, Botswana‘s national coffers have been on the receiving end of poorly performing state owned enterprises (SOEs).These quasi- governmental organizations have been returning to authorities’ year and year out to seek more capital investment, some seeking  guarantee to loan facilities offered by commercial banks.

However even up to today the financial performance of these institutions is still very much found wanting. After a series of restructurings, remodeling, and retrenchments, among other things,  state owned enterprises space remains a no go area for Botswana to derive any source of pride from, and  one of the burning issues as the nation goes into national polls next week. Earlier this year, Auditor General reported that almost P1 billion pula of public funds has been drowned by 18 of the biggest state-owned enterprises in the 2018/19 financial year. In total, these businesses have registered combined loss adding to P742, 187, 254.00, with 9 parastatals yet to submit their annual reports as at May this year, signaling possibilities of losses figure going up.


THE BACKDROP

Following the 2008 global financial crises the country’s state owned investment arm Botswana Development Corporation (BDC) was the first to be hit, registering losses and failing to pay dividends to government. BDC then whirled into downward trajectories in the following years, marred with allegations of corruption, poor investment decisions. Some of its investment businesses liquidated and collapsed, such as the Palapye Glass project which was later auctioned at just over P10 million after hundreds of millions of investment.

Another culprit is Botswana Meat Commission (BMC), the once globally celebrated and financial sound meat producer registered a net loss of P229.7 million in 2016, following a net profit of P332.6 million in 2015. The net profit realized in 2015 was due to Government cash injection of P600 million. BMC was recently reported to be in over P40 million debts. National Development Bank has  also in the recent years  drowned into financial crises, failing to service its government loans and failing to retrieve its loans from its clientele, thus making losses year and year out. NDB recorded a net loss of P168.2 million in 2017, compared to a net loss of P21.2 million in 2016. NDB was given P400 million by Ministry of Finance during 2016/17 financial year, while P200 million was disbursed during the 2017/18 year.

National utility outfits in Botswana Power Corporation (BPC) registered a net loss of P140.2 million in 2017; compared to a net loss of P99.6 million in 2016 while Water Utilities Corporation (WUC) on the other hand recorded a net loss of P137.6 million in 2017, from a net profit of P119.4 million in 2016. National commercial flights outfit, Air Botswana registered a net loss of P12.4 million in 2017, compared to a larger net loss of P86.1 million in 2016.In 2018 Air Botswana recorded a loss of P42.10 million while Motor Vehicle Accident Fund recorded a loss  of P126.49 million. Botswana Agriculture Marketing Board BAMB recorded a loss P65.36

On a major highlight, in February 2016 government agreed to guarantee a 1 billion pula loan acquired from Barclays Bank by BCL, a state owned mine, 8 months later the country’s oldest copper and nickel mine was shut down sending over 5000 direct employees to streets. It was reported that 3 weeks before a decision was taken to close BCL , the company’s management had submitted a proposal requesting another P1 billion from the government, and decision makers reached a consensus that enough was enough, no more bail out.

CALLS FOR PRIVATIZATION

Calls have been rife across all walks of political and economic commentary, with observers urging government to exit doing business with a view to give space for private sector. In 2016, while speaking at Grant Thornton Private Growth Business Awards, former cabinet minister and business man, Charles Tibone indicated his lack of faith in the public enterprises in terms of their growth potential owing to their continued non-performance. “What is even more concerning is that the majority of these parastatals businesses are chronically unprofitable, they operate on negative returns on investment or on life support from Government through subsidies,” he said.

Tibone noted that a case can be made for parastatals that provide a social service like Water Utilities Corporation (WUC) or those which regulate sectors such as Botswana Communication Regulatory Authority (BOCRA) or Civil Aviation Authority (CAAB) not investment business, banking and financial services , logistics and airline businesses.
Last year former Member of Parliament for Tati East, Samson Guma Moyo made a public call to government, urging the state to fast track disposing of Botswana Development Corporation (BDC), Local Entrepreneurship Agency (LEA), National Development Bank (NDB), & Citizen Entrepreneurship & Development Agency (CEDA) into one competitive development Bank. Moyo said the aforementioned parastatals were a complete waste of government limited resources as their mandates and purpose of establishment were more or less the same and a duplicate of one another.

RESTRUCTURING, MERGING PRIVITISATION EFFORTS

One of the ministries that house a good number of parastatals is Ministry of Investment, Trade & Industry (MITI). Currently 80 % of MITI total recurrent budget allocation goes to funding its parastatals. MITI houses 8 parastatals and 3 state owned enterprises making a total of 11.In the 2017/18 MITI channeled over P753 million pula on its 9 parastatals which include CEDA, BITC and LEA amongst others compared to P721 563 220 spent in the previous financial year being 2016/17.

Figures indicate that The Citizen Entrepreneurship Development Agency (CEDA) has been receiving the largest share of this money from the past 5 financial years. In 2013/14 CEDA received over P340 million, in 2017/18 the agency received over 298 million pula. CEDA which is a financing agency to promote entrepreureship amongst local’s suggestion were already proposing its merger with BDC and /or NDB. Last year Minister of Investment Trade and Industry Bogolo Kenewendo announced that a process was ongoing to merge some of her ministry parastatals.

In February this year government through PEEPA announced that  state owned airline Air Botswana currently running four operations in house, being passage business, ground handling facilities, engineering and maintenance, as well as cargo services would be restructured.“We want to unbundle it and asses these divisions separately and propose independent operations of this segments so they run efficiently” he said. With BMC, PEEPA CEO said in an interview with WeekendPost in February this year that following government‘s decision to liberalize the beef industry and open up the market with regard to beef oversea exportation , more players will emerge  mirroring the end BMC monopoly.

WE STILL NEED STATE OWNED ENTREPRISES – PROFESSOR LUMUMBA

In this wake of privatization wave, experts and observers however still note that Africa still needs state owned enterprises to realize its developmental goals, transformation of its economies and creation of employment for its people.   Renowned Lawyer, thought leader and international pan African speaker Professor Lumumba is of the view that the African Agenda of high income economies will require significant government participations.

In a interview with local journalists in Gaborone last week Lumumba said African countries should borrow a leaf from Scandinavian countries in the area of successfully combing government participation with private sector for economic growth “I don’t agree with the talk that private sector is the solution to all our problems, we need to combine public ownership and mix it up with private sector DNA, by doing so we ensure that the social investment aspect of the business is take care off” he said.

Observers say non performance of State owned enterprises in Africa and Botswana in particular is an issue of poor management, political interference and corruption. “Norway, Sweden, Demark and other Scandinavian countries have successfully managed to combine commercial interest with best interest of the general population, the private sector comes with good corporate governance and wining business models, and government comes with social investment interest”

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BODANSA strikes gold with a handsome P45K windfall from Turnstar Holdings

27th February 2024

The Botswana DanceSport Association (BODANSA) has been graced with a financial boon of P45,000 courtesy of Turnstar Holdings. This generous endowment is earmarked for the illustrious Botswana International Dance Sport Grand Prix Championships, which are scheduled to animate Gaborone from Friday to Saturday.

At a media engagement held early today, BODANSA’s Marketing Maestro, Tiro Ntwayagae, shared that Turnstar Holdings Limited has bestowed a gift of P45,000 towards the grand spectacle.

“We are thrilled to announce that this backing will enable us to orchestrate a cultural soirée at the Game City Marque locale, a night brimming with cultural fervor set for March 1, 2024, from 6pm to the stroke of midnight.

This enchanting space will also serve as the battleground for the preliminaries of traditional dance ensembles—spanning the rhythmically rich Setapa to the euphoric beats of Sebirwa, the spirited Seperu, the heavenly Hosana, and more—in a competition folded into the Traditional Dance Groups Category. The ensemble that dances into the judges’ hearts will clinch a grand prize of P10,000,” elaborated Ntwayagae.

He further illuminated that the cultural eve would not only celebrate traditional melodies but also the fresh beats of contemporary dance variants including Hip Hop, Sbujwa, Amapiano, among others, in a dazzling display of modern dance mastery.

Moreover, these championships carry the prestigious recognition by the World DanceSport Federation as a qualifying round for the Breakdance category for the Paris 2024 Olympics. “This is a monumental opportunity for athletes to leap towards their Olympic dreams during one of the penultimate qualifiers,” underscored Ntwayagae.

Looking ahead to March 2, 2024, the festivities will propel into the University of Botswana Indoor Sports Arena for the championship’s climactic showdowns encompassing Breakdance, Latin, and Ballroom Dancing.

 

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Government of Botswana yet to sign, ratify the UN-CRPD

26th February 2024

In Botswana, a beacon of democracy in Africa, the right to participate in the political discourse is a cornerstone of its societal structure. It’s an avenue through which citizens shape the rules and systems that govern their everyday lives. Despite this, recent studies indicate that Individuals with Disabilities (IWDs) are notably absent from political dialogues and face substantial hurdles in exercising their democratic freedoms.

Research within the nation has uncovered that IWDs encounter difficulties in engaging fully with the political process, with a pronounced gap in activities beyond mere voting. The call for environments that are both accessible and welcoming to IWDs is loud, with one participant, who has a physical disability, spotlighting the absence of ramps at voting venues and the dire need for enhanced support to facilitate equitable involvement in the electoral process.

The challenges highlighted by the study participants pinpoint the structural and social obstacles that deter IWDs from participating wholly in democracy. The inaccessibility of voting facilities and the lack of special accommodations for people with disabilities are critical barriers. Those with more significant or intellectual disabilities face even steeper challenges, often feeling marginalized and detached from political engagement.

To surmount these obstacles, there is an urgent appeal for Botswana to stride towards more inclusive and accessible political stages for IWDs. This necessitates a committed effort from both the government and relevant entities to enforce laws and policies that protect the rights of IWDs to partake in the political framework. Enhancing awareness and understanding of the political landscape among IWDs, alongside integrating inclusive practices within political entities and governmental bodies, is crucial.

By dismantling these barriers and nurturing an inclusive political environment, Botswana can live up to its democratic ideals, ensuring every citizen, regardless of ability, can have a substantive stake in the country’s political future.

 

 

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People with Disabilities Face Barriers to Political Participation in Botswana

23rd February 2024

Individuals challenged by disabilities encounter formidable obstacles when endeavoring to partake in political processes within the context of Botswana. Political involvement, a cornerstone of democratic governance, empowers citizens to shape the legislative landscape that impacts their daily existence. Despite Botswana’s reputation for upholding democratic ideals, recent insights unveil a troubling reality – those with disabilities find themselves marginalized in the realm of politics, contending with substantial barriers obstructing the exercise of their democratic liberties.

A recent inquiry in Botswana unveiled a panorama where individuals with disabilities confront hurdles in navigating the political arena, their involvement often restricted to the basic act of voting. Voices emerged from the study, underscoring the critical necessity of fostering environments that are accessible and welcoming, affording individuals with disabilities the active engagement they rightfully deserve in political processes. Noteworthy was the account of a participant grappling with physical impairments, shedding light on the glaring absence of ramps at polling stations and the urgent call for enhanced support mechanisms to ensure an equitable electoral participation.

The echoes reverberating from these narratives serve as poignant reminders of the entrenched obstacles impeding the full integration of individuals with disabilities into the democratic tapestry. The inaccessibility of polling stations and the glaring absence of provisions tailored to the needs of persons with disabilities loom large as formidable barricades to their political engagement. Particularly pronounced is the plight of those grappling with severe impairments and intellectual challenges, who face even steeper hurdles in seizing political participation opportunities, often grappling with feelings of isolation and exclusion from the political discourse.

Calls for decisive action cascade forth, urging the establishment of more inclusive and accessible political ecosystems that embrace individuals with disabilities in Botswana. Government bodies and concerned stakeholders are urged to prioritize the enactment of laws and policies designed to safeguard the political rights of individuals with disabilities. Furthermore, initiatives geared towards enhancing awareness and education on political processes and rights for this segment of society must be spearheaded, alongside the adoption of inclusive measures within political institutions and party structures.

By dismantling these barriers and nurturing a political landscape that is truly inclusive, Botswana can earnestly uphold its democratic ethos and afford every citizen, including those with disabilities, a substantive opportunity to partake in the political fabric of the nation.

 

 

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