Monday, April 19, 2021

Privatisation fund suggested as govt moves to divest from its entities

PEEPA has been told that Batswana and the private sector are ready for privatisation but was warned there must be supporting structures in place, like financial capacity and citizen empowerment strategies.

The feeling in the country is that if privatisation was to take place today, a lot of people will miss out on the gravy train and become spectators as few rich individuals carrying Botswana ID cards take control of state’s silverware.

Managing Director of Bayport Financial Services, Father Maphongo, suggested that the private sector has the skills, but they will need a back up of financial capacity and funding.

“Try us. We will do it.,” Maphongo told a workshop for editors and business journalists this week. “If you do not try us you will not know that we have the capacity.”

PEEPA is in the process of helping government privatise some of its entities with Botswana Telecommunications Corporation (BTC) slated for an Initial Public Offering (IPO) sometime this year.
Through the help of experts, the agency is spearheading the listing of part of state controlled telecommunications outfit on the bourse, where 49 percent will be sold to Batswana through the Botswana Stock Exchange (BSE).

If the BTC process is successful, it will be followed by the privatisation of the National Development Bank and the outsourcing exercise that has been sanctioned by the President directive.
Other state underpinned entities will follow suit, including those that are earmarked for merger and rationalisation as government moves to focus on its core business of providing basic services and leaving the running of the companies to the private sector.

“Batswana are ready to take the challenge, but there are things that government should do first,” added Maphongo, suggesting that funding should be readily available so that Batswana can participate in the outsourced entities.

He suggested that governments around the world help their citizens in terms of citizen economic empowerment schemes.

However, Maphongo advised that there is no need to create new financing institutions when PEEPA or Citizen Entrepreneurial Development Agency (CEDA) exists.

But he has identified some limitations: “CEDA is limited. It is focused on SMMEs. If say Botswana Railways is privatised now, no one will access P100 million from CEDA.”

Instead, the private sector is pushing for the creation of a privatisation fund and Maphongo advised that PEEPA talk to CEDA on how the fund could be set up.

However, government is of the view that there are wide ranges of financial suits that Batswana could use to become investors.

Director of Public Sector Reforms at the Office of the President, Dr Coach Kereteletswe, said although finance has often been seen as a difficulty, financial discipline sometimes is a problem for Batswana.

“Yes money is a problem. But we people are a problem (also). Even when there is financial assistance, we do not have the necessary discipline. We do not have the discipline to grow what we have,” revealed Kereteletswe.

He was referring to previous looting of CEDA when it was new when young people got funding, but preferred to spend the money on luxury vehicles.

As of April 2011, government has 45 entities of which 18 are commercial while 27 are non commercial. As of 2009, government equity holding on these parastatals stands at P4.46 billion.
Botswana is one of the few countries in the world that still run parastatals and it argued that if the country does not privatise now, it runs the risk of being supervised by the IMF or World Bank.

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