Sunday, June 16, 2024

BTCL public listing is a scandal waiting to happen

Since late last year, there is not an evening prime time news bulletin that passes without a cabinet minister or some obscure Member of Parliament seen gracing the screens of the state owned Botswana Television exhorting their electorate and Batswana in general to seriously consider investing their money in the public listing of the Botswana Telecommunications Corporation Limited (BTCL).

This in a way is understandable. Botswana Government has been under immense pressure to show proof of returns for the investment of millions of Pula spent over the years in efforts to privatise state owned enterprises. Many key officials inside Government are united that privatisation agency ÔÇô PEEPA has from day one been a stillborn investment on the part of Government. No targets have been met. And no policy paper seen through!

Creating glamour and fanfare surrounding the public listing of BTCL might buy Botswana Government a reprieve in the short term in its quest to be seen to be doing something on privatization, but it is important that the IPO is put into context.

More importantly, it is troubling to note that nobody is making any effort to tell Batswana of the pitfalls of investing in equities, much less the truth behind the so-called privatisation of BTCL (Botswana Telecommunications Corporation.)

That truth includes the uncomfortable truth that BTC is effectively a shadow of its past self. And also that only a part of BTCL, the mobile phone section, called be-mobile holds any real chances of competing in the fast changing technology based technology sector.

Even then, beMobile, compared to its director competition ÔÇô Mascom and Orange, is by any measure a minnow.

Additionally it seem to be conveniently left out of the all the public narrative that only 49% of BTCL is open to the public. And that the Government will retain the controlling state, which will include all management decisions.

But even then, that is only half the story.

Given the extent to which the listing has been communicated, including at the highest levels, cannot be a case of slight omission that all the people who are gleefully marketing the IPO are making no reference to the blatant reality that the listing happens after a decision had been taken to effectively strip BTCL as it used to be.

That stripping has resulted in taking away the massively important part of the business that houses infrastructure away from the company and shunting it to another government owned business called BOFINET.

All telecommunications experts will tell you that infrastructure is the backbone of that industry. And that any business that exists by paying rental costs of infrastructure can at best have a tenuous existence.

This is a crucial piece information that should form part of the disclaimer in the IPO prospectus.

Regrettably that is not the case.

It is not yet too late for Government to come up with an addendum effectively pointing out that while they encourage the public buying of BTCL shares, those who do so do it at own risk.

The world over, investing in the stock exchange as indeed is investing in any platform has remain subject to immense risks.

BTCL shares are not an exception.

It therefore confounds logic why those hell-bent on selling BTCL IPO want to create an impression that such an act is foul free.

Government’s quest to be seen to be seen to be doing something profitable in the privatisation front should not override traditional requirements for transparency, especially with regard to investing on the stock exchange.

Excessive emphasis is placed on the fact that only P1000 is needed for one to participate in the IPO. And also that investing in the IPO will diversify participants’ portfolios especially of people in the rural areas away from traditional stock of cattle and other such livestock.

This is misleading.

We are of the view that such comparisons are deliberately if not recklessly misleading.

Such comparisons are clearly overstated. They are hyped at a calculated cost of hiding the attendant risks and dangers of investing in the stock exchange, especially for poor people that do not have disposable income and who, in order to participate in the IPO would have to forgo other priorities that they are more accustomed to.

When a few years down the line the people who are today being goaded to buy BTCL shares find no returns coming, the same Government will be expected to pay a political price. The same way it is today having to deal with a public fallout created from its handling of Vision 2016 over the years.


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