Tuesday, November 28, 2023

Gov’t obsession with control undermining regulators

The creation of regulatory frameworks, especially those that oversee natural monopolies are a long overdue process, Government argues, the establishment of which was called for even by opposition in parliament.

That indeed is true, but only up to a point.

The trouble is that these Authorities, once created become at best a watered down version of what was called for and at worst a total opposite.

Regulation is not only expected to encourage competitiveness, break monopolies, increase efficiencies, facilitate enterprise and incentivize investors, it is also expected to come on the side of the public by putting and keeping prices down.

That is not what we on the ground.

Our regulatory authorities are so weak that instead of providing solutions, they become part of the problem.

This is mainly because of the powers given these Authorities by the laws establishing them.

There is ample evidence to suggest that Government has now internalized ways of using legal clauses to give with one hand and take away with another.

These entities are created not out of conviction, but rather as an apology.

Government uses disabling clauses as a template to dis-empower regulators, water down regulation and in the case of telecommunications in so far as it relates to BTC/Bofinet to introduce privatization that is unlikely to benefit anybody other than Government while exciting the public with empty promises.

With regard to BTC, when it was privatized, Government took a decision to create a separate company, BOFINET which took over all the infrastructure asset backbone.

These assets are unregulated and are 100% owned by Government.

The justification was that they were of too important a strategic interest to be left in the hands of private interests.

Even with regard to the retail section, only 49% of BTC actually went into private hands.

  In an instance where utilities are state owned such as is the case in Botswana, this ends up rendering regulators utterly toothless as to be useless.

That is the feeling about BOCRA (Botswana Communications Regulatory Authority.) It is also a feeling with regard to BERA (Botswana Energy Regulatory Authority)whose recent creation has been particularly revelatory about Government continued attitude towards regulatory bodies.

Of course with regards to BOCRA there have also been murmurs of regulator capture by the industry, not to mention a blurred line of separation between BOCRA and the country’s nefarious interest like intelligence and security sectors.

With regards to BERA, it would be an exaggeration to say the Authority has the kind of explicit sanction over Botswana Power Corporation. Yet BPC is by far the biggest juggernaut on energy matters ÔÇô and by no measure the most efficient.

According to BERA, the generation mandate of power will be above BERA’s regulatory reach.

Only distribution is within BERA, and even then only up to a point.

How this will unleash new potential and incentivize new players and new investors to enter this market beats the minds.

Obsession with control ultimately undermines regulators.

This obsession manifests itself at two stages: the first is that government wants to stifle the power of regulators by creating no-go zones for them.

The second is that regulators are themselves not fully empowered to deal with a whole spectrum of exigencies that are left to cabinet through line ministries.

Those who have for years called on the establishment of a regulatory body to oversee power and energy sector will be

Establishment of BERA will for them be an anti-climax.

Not because of its own liking, BERA will exist as a hands-off regulator; Impotent and powerless to rein in the malaise and excesses that have for years dogged the sector.

BPC will continue as it has always done, answerable to a shareholder who is least concerned by efficiency and is by control and ownership.

That we have for a long time seen happen with the telecommunications sector.

To a certain extent we have seen in the past Government we have also saying its media and broadcasting operations will be exempt from the rules and regulations governing those sectors.

To a very large degree these exemptions have given such companies a free ride that is totally at odds with reasons for creating regulatory authorities in the first place.

So much for regulation in this country! We might one day have to start all over again.


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