Botswana Government can no longer afford to run a plethora of parastatals many of which that other than being employment bureaus, they no longer serve much purpose to the nation.
It might be time to reduce the number of parastatals that the country has.
To achieve that Government has to be steadfast as to be a bit ruthless.
Thankfully, in a recent interview with Bloomberg, President Mokgweetsi Masisi has signaled that he is open to reducing the size of the public service.
For many years now, both the World Bank and the IMF have derided Botswana’s bloated public service and also the unsustainably high wage bill.
Since the days of Festus Mogae there has been talk of reducing the size of public service.
But every such decision has been bogged down by political considerations.
We urge Government to look at the parastatals.
These corporations have over time become empires of those leading them.
Many of them have long diverted from the founding principles for which they were created.
Banging the drums about their self worth and self importance is no longer enough.
Parastatals need to go beyond just their mandates; they also have to contribute to the public co0ffers by way of paying dividends that are commensurate with capital invested in their creation by the state.
Over ten years ago, many parastatals stopped paying dividends.
It has gotten worse with time as instead of paying dividends, many are now approaching their line ministries or the treasury asking for either bail-outs or re-capitalisation.
Parastatals need to put their money where their mouths are.
For its part, Government as the shareholder needs to put in place basic governance structures that could allow parastatals to operate like real business entities.
These will include good executive management and also Board members that can steer good strategies for these bodies.
At the moment many of what passes as Board members are simply lackeys.
Power continues to rest with ministers.
This does not augur well, neither for good governance purposes, nor for results oriented decision making.
A whole suite of re-organisation is necessary.
Government should also insist on more transparency measures of these parastatals.
In return it is important for Government to increase incentives for serving on these Boards.
Against those incentives Government could reduce the length of time a Board member could serve.
Also it is important to avoid a situation where one individual serves in multiple Boards.
More importantly, an executive of any one parastatal should never be allowed to sit on the Board of another parastatal.
Reforming the parastatals is crucial because given the nature of Botswana’s economy, any resurgence will invariably be linked to revival of these assets.
One of the biggest problems facing parastatals has got to do with an unwillingness on the part of the shareholder to always have in place a succession plan.
This is despite the fact that for most of the time, incumbent CEOs have in place well-known contract durations.
For many parastatals, a search for CEOs only begins after the incumbent has left.
This cannot be the best way to run organizations of such magnitude, with such huge importance to both the country and economy.
At any given time, the responsibility for succession, should rest not with Government but with the Board.
We want to emphasise that once Government has appointed the Board, the direction of strategy should be left to the Board, who in turn will report to cabinet.
At the moment almost all parastatals need one form of a bailout or another ÔÇô from Air Botswana to National Development, from Local Enterprise Authority to Botswana Power Corporation.
The list is endless.
Before putting any money in any of these corporations, Government should put down a list of demands as conditions before any such money is released.
Key among such demands should be corporate governance.
And also it should be clear from targets set how such money will be returned in a definitive time frame.
Until verifiable process is made on those demands, no money should be raised.
Social mandate of these parastatals is something that does not need too much emphasis.
These entities were created because the private sector was either too weak or simply non-existent.
Government had to come in a somewhat diluted form.
But the country has moved leaps and bounds since independence.
It is thus time that social mandate is strictly wedded to profitability, because in real life the two are not mutually exclusive.
One reason why parastatals have been failing is not that the economy is not doing well for them.
It is simply that the Boards and Executive management in many of them been flouting governance rules.
It is not unusual to have a CEO literally being the one scouting for people to sit on his Board.
This creates a situation of closeness that invariably makes hard decisions almost impossible to make.
