29 Aug 2024

To further enhance Botswana’s developmental path and boost the national economy, privatising state-owned enterprises (SOE) is the way to go.

Speaking during the second day of the third 17^th National Business Conference (NBC) in Francistown, Ms Tania Begazo, senior economist for Markets, Competition and Technology Unit at World Bank said building on state assets would enable private sector development.

She said a stronger state presence in the economy results in poor market performance, thus resulting in a high number of small entities making up a large percentage of the market.

Ms Begazo said the financial performance of Botswana’s SOEs has generally been weaker than international benchmarks, stating that 46 per cent of Botswana’s Business Operating Systems (BOS) operated in a climate of highly vulnerable sectors thus negatively affecting production, distribution and customer satisfaction.

Furthermore, she said the scope of Botswana’s state shareholdings in business was much wider than traditional SOEs, having 37 per cent of Botswana’s domestic BOS being minority-owned, adding that Botswana’s domestic BOS operated mainly in competitive sectors with a higher risk of distorting markets.

“At least 71 BOS enterprises operate in competitive or commercial sectors where private firms are also present or private sector participation is generally feasible”, she added.

CEO of Public Enterprises Evaluation Privatization Agency (PEEPA), Mr Ishmael Joseph said a lot has come out of National Business Conference (NBC) which will drive forward the privatisation agenda.

He said privatisation was context-based and requires quick decision making, adding Botswana had not yet come to a point that nears that level, noting that amongst some of the plans PEEPA came up with, was to link privatisation with the National Development Plan (NDP 12) in the next privatisation master plan.

He said the ownership policies for SOEs needed to be administered and urged entities to strive for partnerships and look for value chains.

Acting CEO of Botswana Stock Exchange (BSE), Mr Kopano Bolokwe said BSE was an instrumental asset in uplifting Botswana’s economy, adding that Botswana needed to grow by 6.7 per cent to escape the middle-income trap; so the more SOEs BSE lists the bigger Botswana’s stock market becomes, and the burden of the government supporting small businesses reduced.

“When you list SOEs on the stock exchange other SOEs get inspired, thus growing the stock market”, he stated. Ends