03 Feb 2020

While parastatals or State Owned Enterprises (SOEs) are vital to the economy, the government is concerned that some such as Air Botswana, National Development Bank (NDB), Botswana Meat Commission (BMC) and Botswana Railways continued to register losses.

This was said by the Minister of Finance and Economic Development, Dr Thapelo Matsheka in his maiden Budget Speech delivered in Parliament yesterday.

Dr Matsheka said only few parastatals, Botswana Telecommunications Corporation (BTC), Water Utilities Corporation (WUC) and Botswana Power Corporation performed satisfactorily, although the latter continued to receive substantial subvention from government.

However, the minister said performance was narrowly focused on financial performance, even when the parastatals had not achieved or met the delivery of projects for transformation and high income status.

He said government spent substantial resources on parastatals, as P4.9 billion had been proposed for 2020/21 financial year in the form of subventions or grants.

“It is therefore important that these resources be used efficiently to contribute to the transformation agenda,” he said.

Dr Matsheka said a subcommittee of Cabinet would undertake a comprehensive review of the parastatals’ landscape, adding that the subcommittee would interrogate the efficient use of public resources deployed to those organisations and provide value-for-money to the tax payer.

“In addition, government will develop standards for benefits across the public sector, including SOEs, in order to curb wastage,” he said.

Minister Matsheka also urged the parent ministries and the whole government in general to reform their internal processes to support transformation.

Botswana Meat Commission (BMC) and National Development Bank (NDB) needed immediate attention and the minister said despite the government’s recent intervention, a capital injection of close to a billion Pula, the BMC was technically insolvent.

According to the minister, a management company had been engaged to take over the running of the BMC with effect from April this year.  The measure, he added, was intended to protect the interest of all stakeholders, including farmers.

Furthermore, he pointed out that government was proceeding with the conversion of BMC into a company, following the repeal of the BMC Act, eliminating the entity’s monopoly on the export of beef and cattle.
Talking about the struggling NDB, the minister said the African Development Bank (AfDB) undertook a diagnostic analysis of the challenges besetting the bank.

He said the AfDB had since submitted its report containing recommendations on turning around the performance of NDB and the report had been passed to the board for implementation. ENDS