Wednesday, November 30, 2022

A total of 12 parastatals to be fused into five

Fresh information has emerged that a total of 12 parastatals will be collapsed into five, while two will be wound up and their functions transferred to government departments as part of President Mokgweetsi Masisi’s aggressive reforms aimed at overhauling the bloated state sector.

Sunday Standard revealed last week that Cabinet has approved plans to merge Citizen Entrepreneurial Development Agency (CEDA) with Local Enterprises Authority (LEA) and to collapse SPEDU, Botswana Investment and Trade Centre (BITC), Special Economic Zones Authority (SEZA) and Botswana Tourism Organisation (BTO) into one parastatal.

It has further emerged that government plans to merge the Rapid Skills Development Centre (RSDC) and Gaborone Technical College within two years. According to a Presidential Directive, a copy of which has been passed to the Sunday Standard, Cabinet has approved the proposed merger with an option to privatise GTC.

Cabinet has also approved a merger of Human Resource Development Council (HRDC) with Botswana Qualification Authority (BQA) within two years. It also approved plans to wind up Institute of Development Management (IDM) operations and have the local chapter subsumed under the UB Centre for Continuing Education within two years.

The Presidential Directive also revealed government plans to centralise authority over Banyana farms and the functions of the Vision 2036 Coordinating Agency. According to the official document, government will within six months wind up Banyana (Pty) Ltd and lease out remaining farms. The farm leases will be transferred to the Ministry of Land Management, Water and Sanitation while the farms will remain under the Ministry of Agriculture. Cabinet has also approved plans to intergrate the functions of the Vision 2036 Coordinating Agency under the National strategy Office.

The National Strategy Office (NSO) is mandated to coordinate the development and implementation of national strategies through research, management, monitoring and evaluation of sectoral strategies. It started operating in 2010 as an action item of the Botswana Excellence Strategy and operates under the Office of the President.

The rationalisation of State-Owned Enterprises (SOEs) is to ensure optimum utilization of state resources, reduce public expenditure; reduce overlaps and duplications; and ensure effective and efficient service delivery through synergies.

The SOEs bloated structure and overlapping mandates are believed to be partly responsible for inefficient use of state resources.

Delivering her maiden budget speech in Parliament earlier this year, Finance Minister, Peggy Serame said there was a pressing need for reforms to restore fiscal stability in the country and pursue the transformation and development goals laid out in Vision 2036.

The minister said the civil service wage bill in 2020-2021 was more than 16 percent of the Gross Domestic Product compared to the “acceptable 10 percent recorded by comparator nations,” while support to parastatals amounted to P4.08 billion in 2021-2022. The minister revealed plans to decrease parastatal subventions by P60 million in the upcoming year.

For many years Bretton Woods institutions: The World Bank, and International Monetary Fund (IMF) criticized the size of Botswana Public Service.

“Fiscal reforms are needed to lock-in consolidation efforts. They include civil service reform, acceleration of plans to rationalize the parastatal sector and improve its governance, and a strengthening of the fiscal framework to better anchor fiscal policy and increase credibility,” the IMF said in its assessment of Botswana in April last year.

According to the World Bank Botswana ‘s Public sector is way too big and it is crowding out the private sector. The Washington based global lender says Government’ s wage bill is unsustainable. Botswana spends more than half of the recurrent budget on salaries.

For the entire financial year 2021/22 Government is estimated to spend over P27 billion on public service salaries from a total financial year recurrent budget of P50.6 billion.

RELATED STORIES

Read this week's paper