There is a deep irony and even paradox about what Botswana Development Corporation was established for and what the state owned company has been doing lately.
BDC was established by Botswana Government in 1970 as its premier investment vehicle.
The company has a genuine and fair claim to being one of Botswana’s earliest and indeed enduring blue chips.
The overarching strategy by the founders of the Republic was to have BDC use Government financial strength and muscle to enter into business including through holding equities that would otherwise not be accessible or affordable to citizens, or the private sector given the sector’s well-known fragilities ÔÇô or total absence as was then the case in the seventies.
By establishing BDC it is clear that from early on, the founders understood the power of citizen economic empower.
Recently there have been many disturbing instances where BDC has been selling what could otherwise be looked at as companies of strategic importance and value to Botswana and Batswana.
By far the most glaring and pitiful of these has been what we see happening at the listed company, Sechaba.
BDC control of Sechaba, which is part of the Kgalagadi Brewery Limited, has been steadily reducing.
At its height BDC ownership of Sechaba was well over 25%.
This allowed BDC to be a consequential shareholder that had to be consulted on key decision making processes.
Today BDC ownership of Sechaba sits at 20%, effectively rendering BDC inconsequential, as it were.
Ultimate control now rests with the expatriate company.
Even if one was to be charitable as to consider their double voting rights that only exist in theory as extended by the Agreement, in real life BDC is practically a none-entity in the overall future of the brewer.
Perhaps it is important to once again put into context just who KBL is and more crucially who owns KBL.
Until recently KBL was a crown jewel of the world’s second largest brewer ÔÇô SABMiller.
SABMiller has since been taken over by its long time rival, AB InBev.
Cautionary statements about the impending shareholders meeting signal dark intentions by these new owners to further dilute and reduce everybody’s influence inside KBL while consolidating their power and stronghold.
Already they enjoy substantive powers rendered to them by the management contract under which no Motswana can be a Managing Director or Finance Director.
BDC might be tempted to respond by saying that its decisions to disinvest are anyhow novel since its sells to citizens. But still nothing would be further from the truth.
A careful prognosis of both KBL and Sechaba reveals that the beneficiary has been the external shareholder who by all manner, including underhand tactics has been growing its holding.
BDC is not the only public entity that has eschewed opportunity to grow its shareholding in the blue chips that it had helped either to create or bought into.
Botswana Government has on several occasions declined offers to increase shareholding in Anglo-American Plc.
Anglo-American, a Member of the FTSE 100, is easily one of the biggest, most powerful and most influential companies in the world.
Anglo-American is the defacto owner of De Beers, the world’s biggest diamond miner.
Botswana Government owns 15% of De Beers.
Government shareholding in these flagships has not been by mistake.
It was part of a greater plan deliberately implemented by the founders of this republic.
The extension of such a grand plan is exactly what BDC was designed for.
Unfortunately we see that unraveling before our very eyes.
Where BDC had not totally disinvested you can be certain that it is in the process of doing so, or at the very least is reducing its shareholding.
BDC should remember that whatever stake it holds as equity in these companies, it does so on behalf of Batswana.
And if that holds true, then it follows that selling such stakes literally means taking away from the hands of citizens.
The sale of these assets benefits only a very tiny minority of citizens ÔÇô if any at all.
More crucially, selling assets and turning around on the other side to call the money made from such sales profits, as BDC has been doing does not even begin to remotely resemble the mandate for which BDC was created.
What BDC is doing is not only short-sighted but immensely provocative and counter-productive.
It stands against not just its mandate, but also our founding vision as a country and people.
What sadly is most shocking is that this behavior by BDC management and the board seems not to have attracted the attention or ire of the shareholder.
The indifference by cabinet can thus confidently be surmised as a tacit approval of what BDC is doing.
If BDC indeed enjoys the approval of cabinet, then this amounts to a total departure from the precepts for which not only BDC but also our Government was founded.
If BDC is no longer relevant or no longer fit for purpose, which we as yet sincerely do not believe to be the case, then Botswana Government should seriously consider establishing a sovereign wealth fund that would in the place of BDC become a new investment arm of Botswana Government and more.
