Monday, March 8, 2021

Galeforolwe doubt Matambo’s judgment on certain parastatals

The Finance Minister, Kenneth Matambo’s recent credit on some government parastatals which he said performed well over the past financial years is misguided, says former Chief Executive Officer at the Public Enterprises Evaluation & Privatisation Agency (PEEPA), Joshua Galeforolwe.

Galeforolwe, who is now the Managing Director of Westcliff Capital says Matambo’s recent pronouncement which paints a do not indicate whether government is making a return on its investment in such entities.

The former PEEPA boss said that the reported performance of certain profitable parastatal does not even indicate what returns are being made on capital employed.

According to Galeforolwe, there is need to employ appropriate performance measures in order to show the viability of these enterprises so as to paint a clear picture on their return on investment compared to net profit.

He is of the view that most parastatal organisations have not delivered attractive rates on return consistently for a long time.

Commenting on the long awaited privatisation of the Botswana Telecommunication Corporation Limited (BTCL) which governments say is at an advanced stage, Galeforolwe said, “While an Initial Public Offering (IPO) of BTCL may be attractive to electorates in 2014, its efficiency and sustainability and profit sustainability is questionable.”

Galeforolwe, who was presenting his view at the FNBB annual budget review, held this week however pointed out that the privatization of BTCL is a welcome development.

Regarding parastatal mergers, Galeforolwe observed that the programme is taking rather a long time and it is questionable as to whether the benefits originally envisaged would be realised. He added that without being cynical, at times government appears to be forming more parastatals than it is merging, and gave examples of Botswana Oil and BOFINET. “The budget is silent on the outsourcing of certain core services of government and for example in South Africa and Lesotho, fleet services management has been successfully outsourced, what about CTO in Botswana,” said Galeforolwe.

He also pointed out that that the budget states that the development budget was under spent by 15 ÔÇô 20 percent and added that under spending of both the development and recurrent budgets allocated of local authorities is a common phenomenon.

“This means that contracts are not awarded and therefore the private sector is starved of work. At the same time, services are not delivered are not delivered to Batswana. The opportunity exists for improving project design, planning, execution and monitoring.”

The FNBB annual budget review takes place every year, following the delivery of the annual National Budget speech by the Minister of Finance and Development Planning.

FNBB CEO Lorato Boakgomo-Ntakhwana said at this year’s session that FNBB as a local bank aims at equipping Batswana to further understand the National Budget Speech and what this means to them as individuals and in their everyday lives.

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