Thursday, January 20, 2022

Former US Ambassador blames political inference for BTCL’s delayed privatization

As the delay in privatization of Botswana Telecommunications Corporation Limited (BTCL) continues without any plausible explanation from the authorities, former United States Ambassador to Botswana, Joseph Huggins must be feeling vindicated as he long saw the delay coming some ten years ago.

By 2005, Huggins had already raised concerns that plans for the privatisation of BTCL were proceeding slowly, despite a public statement by former President Festus Mogae in July 2001, during which he announced plans to privatise BTCL. In February last year, thirteen years after Mogae’s commitment, the Public Enterprise and Privatisation Agency (PEEPA), a government entity tasked with turning state companies into private entities, went on record saying the listing of BTCL will be in August 2014. Over a year later, the listing has still not taken place and there is no word from those tasked with privatising BTCL. They have even failed to publish a share sale prospectus of the telecommunications company and they cannot even provide a timeline for when the prospectus will be issued out to the public and potential investors. A prospectus is a formal disclosure document, containing the facts an investor needs to make an informed decision on the purchase of shares. Through an Initial Public Offering (IPO), government had promised to sell 49 percent of its shares in BTCL to the public, of which five percent was to be reserved for BTCL employees and the remaining 51 percent retained by government. That has not happened and no one seems to know when it will happen.

Sunday Standard investigations have unearthed cable communication between Ambassador Huggins and his bosses in the US, classified “confidential” and dated 15 April 2005. The cable was titled “ANALYSIS: LIBERALIZATION AND PRIVATIZATION JEOPARDIZED BY POLITICAL INTERFERENCE” and was sent on a Friday afternoon, 15:33pm to be precise.  Huggins gave his viewpoints on Botswana’s telecommunications industry’s efforts at greater liberalization and the potential consequences of political interference in the nation’s regulatory framework.

Huggins sent the cable after a stakeholders workshop hosted by Botswana Telecommunications Authority (BTA) earlier in February 2005 to publicly debate the further liberalization of the industry to include such services as Voice-over Internet Protocol (VoIP), which optimistically could have been implemented by the end of 2005. Huggins felt that the workshop had been overshadowed by Parliament’s decision to amend the 1996 Telecommunications Act to place licensing and budgetary authority for the BTA under control of the Minister of Communications, Science and Technology. He pointed out that such a move undermined the independence of BTA as a regulator.

“The amendment appears to be driven by political and personal aims rather than sound regulatory policy, and could have serious negative consequences for the attraction of foreign direct investment (FDI) into Botswana,” wrote Huggins in his analysis.

He also reported the Botswana government for undermining BTA’s autonomy. Under a sub-headline “Undermining Regulatory Autonomy,” Huggins wrote that while the BTA has consistently been recognized as a model of regulatory efficiency and independence by the telecommunications industry, this independence was directly undermined by Parliament’s decision in December 2004 to amend the 1996 Act, and place financial and licensing decision-making power under the direct authority of the Minister of Communications, Science and Technology. “This amendment eliminates BTA autonomy”, Huggins wrote.

He pointed out that the amendment was a total reversal of the accolades made in 2001 by the International Telecommunications Union (ITU), which had published a report titled, “Effective Regulation Case Study: Botswana 2001” and in which the report explicitly states: “BTA is one of the few regulatory bodies that enjoys complete freedom in licensing operators and in establishing and financing its operational budget, its level of independence and effectiveness may develop as a world model.” Huggins notes that initial public reactions to the amendment were overwhelmingly negative. He quoted Sunday Standard which at the time had written an editorial saying the amendment “raises new doubts about the government’s sincerity on attracting foreign investments.” Huggins also pointed out that the country’s leading private sector association, the then Botswana Confederation of Commerce, Industry and Manpower (BOCCIM), intended to submit a formal complaint to the government about the amendment. He further wrote, “Despite the public presentation of the amendment as a prerequisite for enhanced efficiency, a picture of political interference, intrigue, and ruling party factionalism has emerged as being the prime reasons why Parliament amended the 1996 Act”. Huggins also showed his knowledge of the ruling party’s factions when he wrote, “ Mmadinare constituency’s MP Ponatshego Kedikilwe, a veteran BDP politician, but not necessarily a supporter of the Mogae government, asked for a compelling explanation as to why the amendment was being advanced”. Huggins pointed out that he had come across reports that suggested the amendment was meant to punish the then BTA Chief Executive Moses Lekaukau for his allegiance to the Kedikilwe faction within the ruling party.

The name of former minister and MP Boyce Sebetela keeps cropping up in Huggins report. He wrote, “The indictment by Mr. Lekaukau is backed by separate public allegations of misconduct by former Minister Sebetela, which were reported by the opposition Botswana Congress Party (BCP) to the Directorate of Corruption and Economic Crime (DCEC) in October 2004. The BCP alleged that Sebetela used his position to award tender contracts to a company, PC Net, in which he is a shareholder and for whom his wife works”.


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