Sunday, April 21, 2024

New economic conditions raise fresh questions about privatization

After a long process of dilly-dallying, it now seems like there is hope that at least one of the state-owned parastatals, the National Development Bank, will be privatised.

This, of course, comes after Air Botswana, which was identified as the potential guinea pig of Botswana’s privatization exercise, had to be pulled off the knacker’s rails.

Perhaps for a million times now we have stated our position as a newspaper that we support privatization.

Botswana’s privatization process has always been underpinned by Government’s position that they were undertaking the process out of own free will without instructions and not at the instance of such organisations like the International Monetary Fund and the World Bank.

But as we all know, circumstances have drastically changed over the last few months.

While Botswana government was up until late last year not hard pressed for cash, the situation has drastically changed. Our political leaders, like their counterparts in Zimbabwe, are now crisscrossing the world, with the Minister of Finance literally upfront, having refined his skills of begging, cap in hand, calling for creditors to help us finance our budget deficit and dig us out of the economic ditch into which we find ourselves.
This is no laughing matter.

What it means is that with the equation having changed so abruptly, we are likely to find ourselves looking around intensely at our family silverware sizing each of them and asking ourselves which of them was likely to get us the quick money we so desperately need as a nation to finance our many competing development agendas.
This brings us to the position we have maintained for many years that we should have fast-tracked our privatization process during a time when we called the shorts as to be able to dictate the terms at the negotiating table.

Experiences from such countries as Zambia, where state assets were sold for a song because the country needed money badly, only for the government to later buy them at a higher premium, should have provided us with handsome lessons.

Already, the Government of Botswana has invested a lot of money in setting up the structures of moving ahead with privatization.

What is of doubtful value now is whether this is an opportune time for us to be privatizing, or whether we should hold on to our assets as a nation until the economy turns around and our government is able again to regain its position of strength vis-à-vis the potential strategic partners at the negotiating table.
This is the kind of advice that our political advisors should be actively soliciting from the technocrats inside government.

While we want the Government to go ahead with privatization, our concern is that Botswana’s interests should never be compromised under any circumstances.

The last thing we want as a country is to be negotiating from a position of weakness, and our fear is that we currently are because of the economic downturn which, thankfully we think is a momentary disadvantage that we will overcome with an expected turnaround.
By its very nature, privatization is an emotive process that almost always brings about controversy.

This is because as much as it as an administrative and economic issue, privatization is also a political hot potato.

And this being an election year, it is natural that government will approach everything that is likely to rub a sizeable number of people the wrong way with some added caution.

In that regard, we call on government to take it upon itself to confirm and verify that the fears and uncertainties among the NDB employees and management are dealt with accordingly.

This we think is a process too important to be left to the exclusive authority of PEEPA management, which, as we all know, has an openly vested interest to see something big happen on the privatization front, not least because since PEEPA was created 8 years ago there has to date not been much to show, other than, of course, minor outsourcing contracts in some parastatals.

The gist of this commentary is that while the case for privatization remains as strong as ever, the important question to ponder over is whether this is the best time to push ahead with the process.

This is a question that has to be approached with an open mind by all the concerned parties so that in the wholesome, Botswana as a country achieves the maximum gains from the reforms as envisaged by privatization.
In saying so, we are in no way calling for the halting of privatization. To the contrary, we are calling for extra care and caution.

The difficult economic phase that we are going through is a passing phase; the hope is that preparations for normalcy ahead should of course continue.

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