President Mokgweetsi Masisi is entering the most painful part of his presidency as he launches the biggest civil service retrenchment exercise in the history of Botswana.
Masisi, who has already suffered a number of setbacks from the Covid-19 pandemic with a number of deaths and shuttered businesses under his watch will be lurching to the 2024 elections with blood on his hands, having presided over the country’s biggest public sector jobs bloodbath ever.
In what is believed to be a sign of the times, it emerged last week that Botswana Telecommunications Corporation (BTC) is planning to cut about 230 workers this year – about 25% of its workforce – in one of the largest layoffs to hit the public sector in recent times.
And that is just the tip of an iceberg. About a dozen or so state-owned enterprises are expected to reduce their headcount by up to 50% in the coming months.
For the entire financial year 2021/22 Government is estimated to spend over P27 billion on public service salaries from a total financial year recurrent budget of P50.6 billion.
The civil service wage bill in 2020-2021 was more than 16 percent of the Gross Domestic Product compared to the acceptable 10 percent recorded by comparator nations, while support to parastatals amounted to P4.08 billion in 2021-2022.
As the World Bank has warned over the years, this is not sustainable and President Masisi finds himself having to carry out the civil service bloodletting. President Masisi plans to decrease parastatal subventions by P60 million in the upcoming year.
BTC is among about the 12 state owned enterprises that have been affected by President Masisi’s rationalization of the civil service.
According to a confidential presidential directive approved on the 27th January 2022, and revealed exclusively by the Sunday Standard earlier this year, government set a six months timeline to extricating itself from a sunk cost trap by selling its controlling shareholding in BTC. The telecommunications company has seen its stock being pummeled since listing on the Botswana Stock Exchange in 2016.
The Presidential Directive revealed that government wants dispose off its 51 percent shares in BTCL. At the time, the share price of Botswana Telecom Corporation (BTCL) was 0.75 but it continued losing much of the share price. Although at the time of going to press the share price had improved to 0.74, it was still lower that its stock price at the beginning of 2022.
Indications are that government does not want to wait for a turn around of a falling stock that is tying up money that could be put to work elsewhere.
Desperate BTC workers have managed to hold onto their livelihoods for now, while tensions are rising after the telecommunications company was ordered to halt the layoffs and go back to the negotiation table with its union. The Industrial Court on Friday ordered BTC to stop its restructuring and retrenchment exercise, consult BTC employees’ union and resolve their differences.
Justice Molomo of the Gaborone Industrial Court also ordered BTC to retract its restructuring and retrenchment notice.
“The parties shall hold a consultative meeting on Tuesday 4th October 2022 ….and the effect of the letters of redundancy issued by the Respondent (BTC) shall be suspended pending the outcome of the aforementioned consultation meeting.”
The fight between the BTC management and its union is believed to be the opening gambit in what is expected to be a protracted war between public sector leaders and workers as President Masisi’s rationalization exercise progresses.
As part of President Masisi’s aggressive reforms aimed at overhauling the bloated state sector a total of 12 parastatals will be collapsed into five, while two will be wound up and their functions transferred to government departments.
Cabinet has approved plans to merge Citizen Entrepreneurial Agency (CEDA) with Local Enterprises Authority (LEA) and to collapse SPEDU, Botswana Investment and Trade Centre (BITC) Special Economic Zones Authority (SEZA) and Botswana Tourism Organisation (BTO) into one parastatal.
Government also plans to merge the Rapid Skills Development Centre (RSDC) and Gaborone Technical College within two years. According to a Presidential Directive, a copy of which has been passed to the Sunday Standard, Cabinet has approved the proposed merger with an option to privatise GTC.
Cabinet has also approved a merger of Human Resource development Council (HRDC) with Botswana Qualification Authority (BQA) within two years. It also approved plans to wind up Institute of development Management (IDM) operations and have the local chapter subsumed under the UB Centre for Continuing Education within two years.
The Presidential Directive also revealed government plans to centralise authority over Banyana farms and the functions of the Vision 2036 Coordinating Agency. According to the official document, government will within six months wind up Banyana (Pty) Ltd and lease out remaining farms. The farm leases will be transferred to the Ministry of Land Management, Water and Sanitation while the farms will remain under the Ministry of Agriculture. Cabinet has also approved plans to intergrate the functions of the Vision 2036 Coordinating Agency under the National strategy Office.
The National Strategy Office (NSO) is mandated to coordinate the development and implementation of national strategies through research, management, monitoring and evaluation of sectoral strategies. It started operating in 2010 as an action item of the Botswana Excellence Strategy and operates under the Office of the President.
The rationalisation of State-Owned Enterprises SOEs is to ensure optimum utilization of state resources, reduce public expenditure; reduce overlaps and duplications; and ensure effective and efficient service delivery through synergies.
The SOEs bloated structure and overlapping mandates are believed to be partly responsible for inefficient use of state resources.
