Sell of state owned enterprises assets worrisome
Dithapelo Keorapetse | Friday November 18, 2016 14:38
Some of these SOEs have been investigated by law enforcement, especially the Directorate on Corruption and Economic Crime for fiscal and revenue crimes and or corruption. Some have or are still being grossly mismanaged. The problem afflicting SOEs have spread to other parastatals which are not necessarily of enterprise nature in various sectors.
The proliferation of parastatals in the 1970s and 1980s was seen by developmental commentators as necessary given the poverty background of the country. However, in many cases these parastatals especially public enterprises have inhibited the growth of the private sector. These have also been used to reward cronies in a neopatrimonialism kind of system where management positions are given to friends, relatives and the politically connected.
It should be acknowledged that some ministries have many parastatals, for instance the Ministry of Investment Trade and Industry has more than ten; Botswana Development Corporation (BDC), Botswana Investment and Trade Centre (BITC), Selebi Phikwe Economic Diversification Unit (SPEDU), Local Enterprise Agency (LEA), Citizen Entrepreneurial Development Agency (CEDA ), Special Economic Zones Authority (SEZA), Company and Intellectual Property Authority (CIPA), Botswana Trade Commission (BOTC), Competition Authority (CA), Botswana Bureau of Standards (BOBS) and Gambling Authority (GA).
What is common about almost all of these parastatals is that they have words such as ‘investment’, ‘business’, ‘entrepreneurship’ in their acronyms or mandate espoused in the vision and mission or the Act. The truth is that these parastatals can be collapsed into two bodies with the authority and power to facilitate domestic and foreign investment and diversify the economy. Having so many of these not only creates bureaucratic red tape but it’s also very expensive for the government which pays subversion to these.
However, it doesn’t mean that the state has to accelerate its selling of governments assets. The announcement and actual selling of BDC, BPC and other SOEs assets is worrying. These are state owned and Parliament which created them has to have a say in the veracity or otherwise of the disposal of their assets. The accelerated privatisation in the form of sales of SOEs, contracting out and outsourcing can be catastrophic to the economy. Without clear guidelines or rules and regulations made by Parliament and transparency, these SOEs assets would be effectively stolen, given to comprador bourgeoisie allied with foreign imperial forces.
The ensuing sales of SOEs assets has all the hallmarks of state capture, the clandestine manipulation of public policy, in this case privatisation policy, to loot. The looting is bad for the economy, it is leading to job losses. When BCL was liquidated, the mains reason given was that there was no business case. But currently there is a scramble for the ‘dead body’ that is BCL. Why? This doesn’t make any sense. In fact what makes sense is that the mine has a business case, provided there’s serious restructuring, recapitalisation and better management, simple.
Nickel and Copper prices are recovering and there’s hope. Why didn’t the mine be put under judicial management instead of liquidation? The reason is simple, BCL diamond rights in the desert will be stolen by the ruling elites and or bourgeoisie compradors and their external masters and the ore and the smelter plant will also be given to friends at no cost. It happened in Zambia and elsewhere in Africa and it is going to happen here.
The Asian Tigers have proved beyond doubt that efficiency and effectiveness is not a function of ownership, but a function of visionary good leadership and better management. When KIA automobile company was facing collapse in South Korea, the state bought shares to bail it out. Today KIA cars transport Botswana MPs. Botswana still hires state owned companies mainly from China to do mega projects. The lesson should be that yes the state can be in business for as long as it works for the economy or the country. We should be studying the Chinese model and the Tigers development trajectory.
Many announcements will be made on the sale of SOEs. BMC is likely to be next and already farmers are crying because of no value for money investment in the cattle industry. The looting is accelerated probably because the future is uncertain. There’s anticipation of what happened in South Africa, blacks have political power and the whites monopolise capital including land. So post 2019 it may be that the new government has political power but the erstwhile governors have economic or business power. Is that why there’s elite corruption at a grand scale? It could be! Parliament has to stop the madness before it is too late.