Thursday, April 25, 2024

Air Botswana remains a focal point in privatisation efforts

Amid efforts to privatise state-owned enterprises (SOEs), Air Botswana emerges as a focal point in the government’s economic transformation agenda. Minister of Finance Peggy Serame recently gave an update on the government’s strategy, emphasizing the importance of privatization initiatives in unlocking economic growth and efficiency.

The Rationalisation Strategy II, sanctioned by Presidential Directive in March 2022, outlines a comprehensive plan that includes the merging of SOEs and the privatization of others. Among the entities earmarked for privatization are Air Botswana and Botswana Savings Bank, reflecting a strategic shift towards enhancing operational effectiveness and stimulating investment opportunities.

Past privatisation attempts have faced challenges, as highlighted by Serame. Despite efforts, no SOEs have been privatized in the past five years. However, she said, the government is actively revising the Privatization Master Plan II to align its implementation with the upcoming National Development Plan 12, demonstrating a commitment to adaptability and long-term planning.

Air Botswana, in particular, has been the subject of previous privatization endeavors dating back to 2016. However, Serame said these attempts faltered due to the entity’s loss-making nature.

Responding to questions by Thapelo Letsholo, Member of Parliament for Kanye North, Serame said Air Botswana is currently undergoing a meticulous process to identify a strategic partner in preparation for privatization, with technical assistance provided by the World Bank.

“Air Botswana’s privatization viability assessment has been completed. The recommendations are to be presented to the Project Board for consideration in April 2024.” She said the milestone signals a significant step forward in the journey towards privatizing Air Botswana, underlining the government’s proactive approach to economic reform.

Yet, challenges persist, hindering the pace of privatization efforts. Serame cited inadequate technical capacity, the intricate nature of the process, and extensive stakeholder consultations as primary hurdles. “To address these impediments, measures are underway to bolster funding and capacity at the Public Enterprises Evaluation and Privatization Agency, the lead agency driving the privatization process.”

The Minister underscored the government’s commitment to transparency and accountability in privatization initiatives. “We are dedicated to ensuring that the privatization process is conducted transparently and efficiently,” she affirmed.

Letsholo had posed a series of inquiries to the Minister of Finance during the parliamentary session, seeking updates on the privatization initiatives in Botswana, particularly focusing on Air Botswana. The questions encompassed several key points: Firstly, Letsholo sought clarity on the entities designated for privatization and the corresponding timelines. Secondly, he inquired about any successful privatizations over the past five years and the lessons derived from these experiences. Thirdly, Letsholo questioned whether there had been previous considerations for the privatization of Air Botswana, the progress made in this regard, and the reasons for its lack of conclusion. Lastly, Letsholo sought to understand the primary factors causing delays in the privatization agenda and the measures being implemented to overcome these challenges.

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