Saturday, September 19, 2020

Tibone is right, parastatals are a waste!

When debating the budget speech in parliament last week, former minister, Charles Tibone, cast doubts on the quality of parastatals.

Specifically, the Member of Parliament said government was not getting proper returns on its investments in the parastatals.

We wholly agree with the Member of Parliament.

We are, however, surprised that this comes like it is a new discovery for the Member of Parliament.
For a man who has been in the public service for over 40 years, most of that time at the level of Permanent Secretary, Tibone should have known all along that many parastatals were an unmitigated waste of resources for the nation.

Sadly, instead of reducing both the size and the number of these institutions, we seem to be still on an upward pedestal, creating new ones and enlarging the existing ones.

Take, for example, LEA (the Local Enterprise Authority) and NBFIRA (Non-Banking Financial Institutions Regulatory Authority). Did we have to create these two new behemoths when their mandates could easily and more efficiently have been subsumed under the already existing CEDA and the Bank of Botswana, respectively?

LEA is today getting a budget that is much bigger than some ministries.
Its core responsibility is training, which we welcome. But the question is “are we getting value for money?” Therein lies our gripe.

Is the return derived from LEA commensurate to the investments put into it? Our view is that it is very unlikely, especially given the fact that LEA is no doubt one of the parastatals with the biggest overheads given that it has offices in almost every village of this country.
The same applies to NBFIRA.

Our view is that we did not have to create a fully-fledged parastatal, in need of millions in budget every year, to regulate non-banking entities in Botswana.

Given the small size of the economy of our country, the Bank of Botswana could have been empowered through a change in laws to allow it to also regulate non banking financial institutions.
While we agree with Honourable Tibone’s observation, we want to go a step further and remind the estimable MP that there is a well-known history to the mediocrity in the parastatals of which he seems to be only discovering their defects and deficiencies today.

For many years, executive managements as well as the Board of these parastatals were the exclusive reserve of failed politicians that could not make it into the elected structures of MP Tibone’s party.

Merit, performance and leadership were thus sacrificed on the altar of party membership and political loyalty.

At the time it did not seem so much a big issue because diamonds continued to churn the billions that bankrolled the national treasury.

But today money is a big issue for the Government of Botswana; and yet all that the behemoths created at great expense over the years can pop out is a paltry P100 million.
That is appalling to say the least when you look at the amount of money government spent creating these parastatals.

The quality of Chief Executives running many of our parastatals is very low. The same applies to the Board members. While many of these parastatals are expected to run and function like businesses, that cannot happen because they are led by people who have never even run a small business.

It is for exactly that reason, Hon. Tibone, that the country is not getting a return on its investments.

The only way to turn the situation around is to streamline the size and number of parastatals and also ensure that they are manned by people with proven track record in business, like yourself, Hon. Tibone.


Read this week's paper

Sunday Standard September 20 – 26

Digital copy of Sunday Standard issue of September 20 - 26, 2020.