At independence, the new government had to step in and set up enterprises to provide a myriad of services such as telecommunications and power generation to mention but a few. However, the historical reasons which forced the government to do so no longer apply. The telecommunications industry is a typical example of a business which does not have to be owned or operated by the government. Globally as well as here at home, the telecommunications business has grown spectacularly in the last twenty years. It has achieved this remarkable feat without any direct support by governments and that is not only a good thing but how it should be at all times.
The same also applies to other sectors of the economy such as airlines, mines, hotels, banks, and water and electricity companies. In fact we have, over time, witnessed the fact that the government is better off leaving many of the activities to the private sector.
I always get interesting responses when I ask people why African governments in particular cling to and are enthralled by the idea of owning airlines. Some attribute this obsession with owning airlines to national pride while others claim that the airline business is strategic and cannot therefore be left in private hands! Interestingly enough, no one ever says that the government own airlines to turn a profit. So it is a mystery why the only major considerations for governments owning airlines seem to be national pride or that the business is strategic or both. African governments’ penchant for owning airlines is tragically self-defeating as we now have a litany of failure, shutdowns and liquidations.
To persist with government ownership of airlines is akin to trying to make socialism succeed and that as we all know, is an exercise in futility. Socialism is a costly experiment that has, without exception, failed whenever and wherever it was tried. In our region alone, the number of failed state-owned airlines is staggering. The recent demise of Air Namibia is but a continuation of this sorry history of emotional attachment to lossmaking airlines until you cannot save them anymore.
So if we are not in the category of those who are preoccupied with making socialism succeed, we have to get on with the business of privatisation to allow people to keep more of their money in their pockets, instead of sending it over to the state whereupon it is used to support loss making state owned enterprises.
When these assets are turned over to the private sector through divestiture or outright privatisation, their performance gets enhanced because the former tends to be nimble, efficient and profit driven in its modus operandi. This success should not in any way be misconstrued as a sign of people in the private sector being innately superior to public servants. It is just that the former are driven by the discipline of the market. In that respect, when they perform well, the market rewards them and when they don’t, their businesses shut down.
However it is a different ball game in government and state owned enterprises. First the enterprise they work for belongs to everyone and no one in particular and in the process, the market discipline is lost. No one bears the risks of running the business and when it flounders, the tax payer injects more cash to keep it afloat. A private business on the other hand does not have the luxury of such a sheltered life, hence the imperative need to control costs and maximise both sales and revenue at all times.
We also have to remember that privatisation is part of structural reforms which are necessary to catapult Botswana to the next level of economic growth. State owned enterprises crowd out the private sector when the latter is our preferred engine of growth. They also gobble up scarce resources which puts ever growing pressure on the tax payer to fork out more of the hard earned money from their pockets.
The state owned enterprises are also a breeding ground for corruption and we have to privatise them in the public interest of upholding good governance.
