Thursday, April 2, 2020

A national decision should be made, not just on BHC but other parastatals as well

The ongoing debate in parliament brought by the Member of Parliament for Gaborone Central, Dumelang Saleshando, through his motion on the Botswana Housing Corporation is informative. Hopefully the parliamentary debate will burst into a national debate.

Unfortunately, as is so often the case, this particular debate in parliament has been blurred by partisan and petty small time politicking.

The issues raised therein are substantive and of national importance.
While the debate may have zeroed in on BHC, the same principles of the debate could easily be extended and extrapolated to cover many other government owned parastatals and companies as well.

To start with we must never lose sight of the underlying reasons why the government of Botswana created such institutions as BHC, Botswana Power Corporation, Botswana Telecommunications Corporation and others.

While ordinarily many such bodies could well be run as private companies, at the time, there was no strong enough private sector to do the tasks yet the need existed.

Government, therefore, naturally moved.
Today circumstances have changed, but the statutes that established these organizations have, to a large extent, not moved at the pace of the changing times.

A conflict between the owners of these institutions and the executives hired to run them was, therefore, inevitable; a result of variances in expectations and or disparities of definitions of the deliverables.

Government has made it clear to BHC and other parastatals, for example, that they are expected to run profitably and declare dividends.

The same government, however, has not given the BHC executives the leeway to operate their affairs according to the ethos expected of profit making enterprises.

Commercial enterprises, if they are to make profits have to make swift decisions.

They also have to disregard populist ventures and adventures in favour of strictly money courses.

Such enterprises need to be always in the look out for new opportunities opening up in the market and need to be flexible enough to usurp such opportunities immediately they present themselves.

That is not the case with BHC and its sister parastatals.
The problem here is not BHC but the government.

It, however, is a totally incontestable story that the BHC has unilaterally diverted from itself; from what it was initially created to achieve.
The fault, of course, may not be entirely the executives’ but that is the reality.

It is not illegal for BHC to be building malls and shopping complexes as that is provided in their Act, but the founders of BHC had in mind the building of houses much more than they cared about luxury shopping centers.

Under pressure to make money and meet the aspirations of the shareholder, the BHC has undoubtedly been slowly but perceptibly veering into those areas to which it was not created.

In the meantime, it abandoned its core areas which it views as less lucrative.
That is the reality that the BHC executives should face.

Instead of barking at the wrong tree, with BHC asking for more autonomy so as to divert from their original mandates, what is needed is for a holistic approach to reexamine the parastatals, the Acts of Parliament establishing them vis-à-vis the Privatisation Policy and the now prevailing commercial realities and expectations of them.

To BHC CEO, it may be unfair to expect him to churn out profits while the responsible minister is reluctant to raise rentals to market rates.
But the BHC CEO has to understand the departing point of the minister.

He is a politician, who looks at BHC as a vote winning instrument which hopefully can also dabble as a cash cow.
We, therefore, suggest that instead of pointing fingers, a national, orderly debate be kick started on what should really be done with some of these parastatals which, as it were, are operating under conditions different from the time when they were established but who are still expected to put national service ahead of profit.
The current atmosphere only encourages caprice which will force knee-jerk decisions.

We think rather than giving powers currently residing with the minister to a faceless board, let there be a debate on where we want to be headed.
BHC is a public asset.
When push comes to shove it is the minister, not the Board Chair who will have their fingers burnt.