Gov’t pours P150m into SOE ‘sinkhole’
Lewanika Timothy | Monday February 24, 2025 11:45
The latest details are contained in draft estimates of expenditure released by the ministry as part of the 2025–2026 budget. The estimates will be confirmed when the Appropriation Bill is passed by Parliament.
According to the draft estimates, the government wants to give Air Botswana additional support of P65 million in the upcoming financial year, over and above an extra P569 million granted in the 2024–2025 financial year.
The two-year Transitional National Development Plan (TNDB) had originally allocated Air Botswana a support budget of P133 million, which was later increased to P702 million last year. The Finance ministry is proposing a further increase of P65 million to P767 million.
“The TEC for the programme needs to be increased by P65 million from P702.7 million to P767.7 million to provide for ongoing airport maintenance, installation and improvement of airport security and safety systems and procurement of aircraft (re-fleeting), amongst others,” the estimates reveal.
The National Development Bank (NDB) is also headlining parastatals due for an additional P150 million in funding in the upcoming financial year.
The draft estimates say the additional P150 million will cover “the restructuring and recapitalisation of the NDB with a view to transform it to an agricultural bank”.
In the last budget, government set aside P621 million in bailouts for Air Botswana and NDB citing generally the same reasons as this year.
NDB’s P500 million recapitalisation was said to be for the administration of the Temo-Letlotlo and Thuo-Letlotlo programmes which are agricultural inputs support programmes for both arable and pastoral farmers.
The Botswana Meat Commission (BMC), another institutions renowned for relying on government coffers, is due to receive extra help this year, although the amounts are unclear as the Commission has been transferred out of the now defunct Entrepreneurship Ministry.
Other notorious lossmakers include Botswana Power Corporation (BPC) and University of Botswana.
The additional funding for state-owned entities runs against the new government’s pledges to tighten funding to parastatals as part of broader fiscal belt-tightening.
Last year, Vice President and Finance minister, Ndaba Gaolathe, promised a shake-up announcement for Air Botswana before December, a statement which is yet to be made.
While parastatals such as Air Botswana have perennially made losses due to poor revenues set against high operating costs, others perform poorly due to stubborn inefficiencies in their operations.
Only three out of 20 state-owned enterprises assessed by the Botswana Accountancy Oversight Authority in 2023 were found to be compliant with corporate governance principles, in yet another damning annual review of standards amongst public entities.
Meanwhile, the latest annual report of the Public Procurement Regulatory showed that public entities achieved only 57% compliance with local procurement standards for the year to March 2024, with some of the biggest weaknesses being seen amongst ministries and parastatals.