Government has decided to apply strict criteria in the creation of new parastatals in the future.
Presenting the 2014/2015 budget proposals, the Minister of Finance and Development Planning, Kenneth Matambo, told Parliament that in years to come, there will be no more new parastatals.
“Given the increased budgetary pressures, Government will be applying strict criteria for the creation of new parastatals, as a measure to contain growth in grant subventions to these organisations,” Matambo said.
“In addition, Government will continue with its efforts to reform the governance structures of these organisations to give accountability to both their Boards and management with clear performance targets. All these measures will allow Government, as a shareholder, to contain costs and demand reasonable returns on equity invested in these organisations, as well as in terms of their contributions to economic growth and employment creation.”
Matambo said government will be working on guidelines for the operation and management of existing organisations. ┬áHe said the Public Enterprises Evaluation and Privatisation Agency (PEEPA) has already started drafting guidelines to be used by Government in overseeing performance of parastatals and monitoring overall implementation.
“The oversight responsibility of parastatals will be decentralised to line Ministries. Relevant Accounting Officers will have overall accountability for ensuring that their Ministries implement the guidelines, with regular reports submitted to the Productivity Improvement Committee (PIC Force) and Cabinet,” he said.
He also said government was currently preparing the Privatisation Master Plan II which its main objective is to identify services and public enterprises that are suitable for privatisation during the period years 2014 to 2019.
“There is no doubt that state owned enterprises played a major role in the development of our economy, especially in the earlier years after Independence. However, I believe that the role of state owned enterprises in the development of this country should continue to complement that of Government, given the limited resources at the disposal of Government. In this regard, it is important that these organisations are managed efficiently and effectively for them to contribute to sustained economic growth.”
Matambo’s remarks come after the parliamentary select committee on statutory bodies and state enterprises had painted a gloomy picture on the performance of parastatals.
The committee led by Member of Parliament (MP) for Gaborone Bonnington North, Robert Masitara, had through its reports laid before parliament recommended that government must establish adequate procedures to assess the performance of CEOs of statutory bodies and to ascertain whether the procedures used by the boards to assess the performance of CEOs were adequate.
The committee was also concerned by the dual role played by some CEOs within the statutory bodies, where they also assumed the role of the chairperson of the board of directors.
This arrangement, they said, was not in line with tenets of good governance and accountability.
It also advised government to avoid appointing employees of certain parastatals to board positions in other parastatals. The report also recommended that salaries and allowances of all CEO’s and Board of directors of parastatals be subjected to remuneration policy drafted by government.