Shareholder contracts a sight for sore eyes

Mmegi Editor | Wednesday July 30, 2014 10:33

The sharehoder compact, the Ministry says, “clearly articulates the strategic intent of the government to parastatals including strategic objectives, performance indicators and targets”. The idea is to ensure that input by way of funding and support is commensurate with outputs. The compacts are indeed music to the ears for all taxpayers both in terms of value for money as well as delivery by parastatals. And while the Transport Ministry oversees only a smidgen of the galaxy of parastatals orbiting central government, the latest initiatives are certainly a great leap in the right direction. For far too long, Batswana as taxpayers have been asked to carry the burden of loss-making parastatals which have – for all intents and purposes – operated in an atmosphere of apparent impunity.

In the last reported financial period alone, the Botswana Power Corporation recorded a P1.6 billion loss while the Botswana Meat Commission had a deficit of P233.5 million. Other parastatals such as Air Botswana, Botswana Postal Services and Water Utilities Corporation have also been in the red for years, and in fact, only the Botswana Savings Bank, BTC and National Development Bank reported surpluses in 2013. Other parastatals such as the Botswana Development Corporation have devolved from years of profit-making to borderline levels, evidently snowed under poor decision-making and possible corrupt practices.

 Government as the sole shareholder of these entities, is forced to pump taxpayer funds by way of additional capitalisation or underwriting of loans, to keep them afloat. Far from remitting a dividend to government every year, these parastatals have become a black hole for taxpayer funds where your hard-earned thebe disappears annually without the benefit of scrutiny or accountability. Finance Minister, Kenneth Matambo announced in February that guidelines for parastatal performance were being drafted and that regular reports would be submitted to a Productivity Improvement Committee and Cabinet. Sceptics snorted at the news as just another whitewash while cynics read “election year” motivations into the announcement. However, the Transport Ministry’s latest efforts point to the possibility that positive outcomes are stirring in central government and that parastatals could finally be effectively monitored and evaluated. We request, however, that legislators closely monitor the ongoing developments with a view for intervention as it is common cause that some of these parastatals are struggling due to unrealistic legislative dynamics.

                                                                    Today’s thought

“Restoring responsibility and accountability is essential to the economic and fiscal health

of our nation.”

 

                                                                      –Carl Levin