Parastatals post uneven performances
Keikantse Lesemela | Wednesday February 4, 2015 11:50
Presenting the 2015/16 Budget Speech, Matambo said the parastatals continued to display uneven performance during the 2014/2015 financial years with some performing satisfactorily, while others recorded operational losses.
Matambo said there is need to closely monitor the operations of parastatal organisations, with a view to ensuring that they continued to contribute to growth and employment creation. “To facilitate this, each ministry will be required to implement the ‘Guidelines for the Exercise of Shareholder Oversight over Parastatals’ to strengthen the governance and oversight structures of the parastatals, which should contribute to the overall improvement in their performance,” he said.
Parastatals, which performed satisfactorily in 2013, include the Botswana Telecommunications Corporation Limited (BTCL), National Development Bank (NDB), Botswana Communications Regulatory Authority (BOCRA), Botswana Housing Corporation (BHC) and the Botswana Meat Commission (BMC).
The BTCL recorded a net profit of P273.6 million in 2013, compared to P236.9 million in 2012. This was mainly due to growth in revenue as a result of increased customer base in the mobile business sector. NDB registered a net profit of P45.8 million in 2013, compared to P40.6 million in 2012.
BOCRA recorded a net profit of P40.6 million in 2013, compared to P31.2 million in 2012. The BHC’s net profit declined to P34.9 million in 2013, from P50.4 million in 2012, due to the rising finance costs. After experiencing hardships in its operations since 2008, the BMC recorded a net profit of P25.8 million in 2013, compared to a loss of P324.1 million in 2012.
This was mostly boosted by increased revenue as a result of re-admission to the European Union market during the year. In 2012, all parastatals incurred losses except Botswana Savings Bank (BSB), BTC and NDB. Parastatals that continued to experience operational and financial challenges include the Botswana Power Corporation (BPC) and Water Utilities Corporation (WUC).
BPC recorded a net loss of P1.3 billion in 2013, compared to P1.1 billion in 2012, due to increase in generation, transmission and distribution expenses. A large part of direct costs were incurred in procuring power from external sources, part of which was subsidised by Government through an emergency power grant. Last year, some parastatals such as the Civil Aviation Authority , BTCL, Botswana Railways, Botswana Post and BOCRA signed a performance contract with the Ministry of Transport and Communications to enable monitoring and performance expectations.
In his budget speech last year, Matambo said the government would be working on guidelines for the operation and management of existing organisations. This will be done through the implementation of the privatisation policy in order to reduce the burden on the fiscus while some will be merged like the Botswana Postal Services and BSB.
Currently two parastatals, BTC and NDB are already undergoing privatisation.
“Privatisation process is at an advanced stage, with expected Initial Public Offering (IPO) in the first half of 2015 while the privatisation and transformation of NDB into a commercial bank is in progress, with commencement of the Transition Act in June 2014”, said Matambo.