The appointment of Cross kgosidiile as Managing Director at Botswana Development Corporation has been met with cautious optimism.
Since Ken Matambo left the corporation, BDC has had a string of CEOs, and each of them has left the government investment arm worse off than they had found it.
All of them had come in promising to turn things around, and then went on to do the opposite.
Uncertainty, a clutter of bad investment decisions and lack of a steady hand have all conspired to undermine and plague BDC.
The investment behemoth that had played a big hand in the formation of such blue chips like KBL, Air Botswana and Avis has become a shadow of itself.
To be sure, the importance of BDC especially in today’s crisis-level unemployment cannot be overemphasized.
But before BDC can play a role in heal the disease of unemployment, it needs, itself to be healed.
BDC offers a fertile opportunity for government to indirectly hold a stake in large scale companies with foreign entities providing technical equity and skills.
Yet in recent years BDC has grown feeble, signaling that this one-time financial behemoth might be grappling with deep and systemic liquidity issues.
As Kgosidiile will soon find out, for BDC, the operating environment has become more and more fraught.
It is a company desperate not only to find its footing but also justify itself.
And there will be a few questions he might need to clarify sooner; what does BDC today see as its national role? Does BDC still yearn to be what it used to be – a big industrial player and a top-notch financier? Or is BDC resigned to fate as it watches itself slide into oblivion, never to rise again? The questions are plain but not easy to answer. A brief from the shareholder will be key in determining the outcome by Kgosidiile.
Over the last few years there have been restructuring after restructuring. Large scale laying off of staff have often been followed by huge and often hard to justify disinvestment.
In the last ten years alone, BDC has hardly had enough serene period to consolidate.
A large-scale sale of such assets that included equity in various companies, residential properties and also warehouses has done pretty little to restore liquidity. Lifeboat facilities by the shareholder as well as approaching the open market have done pretty little to tilt the ship back into an upright position.
At its prime, the BDC portfolio basket was the country’s most diversified and most enviable.
It had a strong presence in transport, logistics, farming, manufacturing, mining, breweries, insurance and financial services. The corporation even had a big hand in helping bring to Botswana the ill-fated Hyundai, a Korean car manufacturing that later closed shop.
Its latter-day investments like Fengue Glass Plant in Palapye and the brick plant in Lobatse have all gone belly-up, in their wake leaving a bleeding corporation and a wounded shareholder.
Billions of pula were lost over a short span.
BDC had been created by people like Festus Mogae, Quill Hermans and Baledzi Gaolathe – all of them Keynesian economists that under the political leader of the then Vice President and also Minister of Finance Ketumile Masire had a free reign in running an open ended economic experiment as they created modern Botswana from the colonial ruins following independence.
Both Mogae and Gaolathe were at the time young economists that had recently arrived from prestigious schools abroad immediately after independence.
They immediately caught the attention of the all too powerful Masire who was seized with crafting statehood. Masire was particularly impressed by their knowledge and skills and the senior politician immediately subjected himself to being the crop’s economic student.
It paid off, as within a few years he had become an astute economic thinker, practitioner and planner on his own.
Gaolathe was to spend twenty-four years on the BDC board.
After many years as Permanent Secretary he later on went on to become Minister of Finance, having set on the board and or management of every major organization in Botswana including Debswana and the Bank of Botswana.
His friend, Festus Mogae ended up his career as President of the Republic. He too had at various times been a board member of every organization of consequence in Botswana.
However, the prestige of BDC, its clout and its importance to both country and government have been declining. This at a time when its peers across the globe have seen their fortunes and prestige significantly skyrocket. BDC was supposed to be Botswana’s answer to such behemoths like the Industrial Development Corporation in South Africa, the Dubai World in the UAE or the Qatar Investment Authority.
Kgosidiile comes from another era. But like Mogae and Gaolathe, he too is among the country’s small but fast rising elite crop of technocrats in his generation. He has been at Motor Vehicle Accident Fund (MVAF). He has also served as CFO and also acting CEO at Botswana Power Corporation.
A Chartered Accountant, he also holds an MBA.
However way it pans out, Kgosidiile’s tenure at BDC is bound to be consequential. He joins BDC when the corporation is at the crossroads – he either rescues it or it explodes in his hands.
If he cannot restore BDC to its original heights, there is a risk that it might never come back.
The last time BDC had an MD who had a direct attachment to the history of its formation was when Ken Matambo was there. He too had been a pupil of Sir Ketumile.
He had arrived at the ministry of finance to find both Mogae and Gaolathe already in high their paces.
Like both of them he rose to become a permanent secretary and later minister in the same ministry.