Monday, July 15, 2024

BTC Privatisation: just what the doctor ordered!

Government has recently announced that the privatization of BTC is on track.
According to official information, 49 percent of the parastatal will be offloaded to citizen investors while Government will retain the 51 percent.
Of course, whether or not the citizens are able to take all of the 49 percent on offer to them will, to a large extent, be a function of availability of domestic capital.

But we want to emphasise that the deal was never meant to raise money for Government, at least not at all cost.

We want to commend the wisdom of Botswana Government and that of Parliament in crafting the BTC Transition Act, in such a way as to allow for provisions that go an extra mile in empowering not only the general citizenry but more specifically employees of the corporation as well.
In fact, as it stands, the law facilitates both citizen economic empowerment as well as economic diversification: Talk of killing two birds with one stone.

Rewarding and incentivising employees is crucial because BTC is a specialised kind of business that needs to attract and retain skilled personnel if it is to grow its market share and enhance competitiveness.

Crucially, the Act also makes a provision to empower and incentivise future employees of the corporation; i.e. those that are not members of the corporation as at the time of the transaction.
A further scrutiny of the same law reveals that only the Government of Botswana, who retain a majority stake anyway, will be eligible to buy shares from citizen investors who, for whatever reason, may want to disinvest or offload their shares.

Of course, some may quarrel about the likelihood that selling only to Government will deny them the efficiencies and market prices that are otherwise provided by a free market.

To those we say it is a lesson well learnt from past experience that Batswana have a sickness, a syndrome, if you like, that drives them to recklessly disempower themselves.

The issue of land is a best living example of just how far Batswana have gone to sell their assets to outsiders even if such auctions do not only impoverish them but also threaten the very existence and national security of their state.

The reason why we applaud Government for having gone a full length to make sure that citizens cannot sell their shares to anybody except the Government of Botswana is because we have seen Batswana skillfully circumvent laws and sell land reserved for citizens only as well as auction trade licenses that Government had reserved strictly for citizens.

When BTC privatization was first mooted, there was talk of bringing in a strategic partner. Of course, we admit that would have made BTC more attractive to international bidders. But raising money was never a fundamental driving force when Government first talked of a need to offload some of their assets.

Government has decided against the route of acquiring a strategic partner and we think that has been a wise decision.

The problem with bringing strategic partners is that while they tend to improve efficiencies and also bring about skills and technology, such a route would have gone against Botswana’s privatisation blueprint ÔÇô the Privatisation Policy, which specifically calls on government to ensure that transactions so carried out are broad-based and also take into account the interests of employees.

It is not a secret that strategic partners often insist on a controlling stake. They also put forward cost cutting measures, which invariably include retrenching staff.

Not only that, a strategic partner would be dangerous and potentially risky given BTC’s strategic importance to Botswana’s communications industry and also to the very security of this state. Asset stripping, which is a key weakness of privatisation deals that emphasise strategic partnership, is impossible under the BTC deal.

Because Government will retain a majority stake it follows that the Trans-Kalahari loops as well as the Gaborone/Francistown loop, which are key components of Botswana’s gateway to the world will remain firmly under the control and ownership of the state.

To us the crucial thing is that government has successfully designed a model under which it retains control.

The structure of our telecommunications industry is such that other players rely very heavily on BTC’s infrastructure.

Under the deal so cleverly crafted by Government, the other private telecommunications players like Mascom and Orange can be certain that they will continue to access BTC infrastructure, which sprawls the entire country.

This is a unique kind of privatisation and for that we applaud the Government of Botswana. The deal achieves so many things all at once.

Things that a normal privatisation transaction could never dream of ever achieving!


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