Gov’t puts SOEs on notice
Spira Tlhankane | Wednesday September 30, 2026 06:00
Vice President and Minister of Finance Ndaba Gaolathe made the warning recently as he unveiled government’s proposed SOE ownership policy, signalling a tougher and more commercially disciplined approach to state ownership.
Gaolathe said government could no longer continue owning enterprises simply because they had historically been placed in public hands.
“The state should periodically examine why it owns each enterprise, whether its mandate remains relevant, and whether the present operating model still serves that purpose,” he added.
He said where private partnerships could deliver greater value, government would consider bringing in private capital, technology, market access, and operating expertise. And where an enterprise’s existing model had become a constraint, Gaolathe said government could restructure it, separate its functions or change the way it operates.
“Where continued state ownership no longer delivers sufficient strategic or public value, government should be prepared to dispose of that interest through a transparent process,” he said.
The proposed policy comes as Botswana faces tighter fiscal conditions, rising public expectations for service delivery and growing pressure to diversify an economy heavily reliant on traditional revenue sources.
Gaolathe said the new framework would require government to become a more deliberate owner by clearly establishing why an enterprise is owned, what is expected of it, how its performance is measured and what happens when its original purpose is no longer being fulfilled.
The policy proposes a hybrid ownership model in which line ministries retain strategic responsibility whilst a dedicated oversight authority would maintain a consolidated view of the SOE portfolio, monitor performance, track fiscal risks, and oversee major investment decisions. Gaolathe said the government also needed to know exactly what its enterprises cost the fiscus and what value they generated.
“Transfers, guarantees, on-lending, operating losses and public service obligations all carry consequences for the fiscus and compete with other national priorities,” he said.
The policy would introduce shareholder compacts, letters of government expectations and statements of corporate intent to translate broad mandates into measurable commitments.
Gaolathe also called for professional and accountable boards selected through transparent, merit-based processes. He further warned against blurred lines between political oversight, board governance and management.
“Ministers should not become informal chief executives, boards should not become extensions of ministries, and management must know where operational authority lies,” he said.
Gaolathe indicated that government also wants public service obligations imposed on commercial SOEs to be explicitly identified, and funded rather than hidden in their balance sheets. Gaolathe said the proposed reforms drew lessons from countries including Singapore, New Zealand, Sweden, Norway, and Malaysia, as well as Botswana’s own experience with entities such as Debswana, Botswana Telecommunications Corporation, and the Pula Fund. However, he acknowledged that the proposed framework still needed strengthening, particularly around fiscal risks, borrowing, guarantees, contingent liabilities, reporting, and consequences for persistent underperformance.
The next step will be legislation to give the policy “binding powers, duties and consequences”.
The eventual law, Gaolathe said, should establish rules for restructuring, mergers, distress, divestiture and closure, whilst providing consequences for persistent failure, unlawful interference, false reporting, and conflicts of interest.
The consultation process is now expected to test the proposed framework before government moves towards legislation.