The government says it will benchmark on the failures of its initially botched plans to privatise Air Botswana and consult extensively while it considers privatising another public entity, the National Development Bank (NDB).
"We learnt a lot from the Air Botswana privatisation process," the Assistant Minister of Finance and Development Planning, Keletso Rakhudu, said on Friday at a stakeholders consultative conference on the privatisation of NDB.
"Privatisation is a complex process and we want to do it right by taking all opinions on board," he said.
This will be done through the Public Enterprise Evaluation and Privatisation Agency (PEEPA) and Nedbank Capital, which has been tasked with coming up with a strategy that could best unlock the value in NDB.
The CEO of PEEPA Joshua Galeforolwe said besides benchmarking with the best international standards, they will also look at privatisation failures in countries like Zambia.
"Botswana wants to do it differently from how the Brettonwoods Institutions define privatisation," he said.
The consultative conference included stakeholders from ministries, parastatals, the financial sector and business. It included a briefing on a due diligence report on NDB, a review of the bank's operations and a report on privatisation options under consideration.
The strategy drafted by Nedbank Capital includes advising the government on the different options that may be pursued. These may include either an outright sale or an initial public offer (IPO), an employee buyout or a strategic partnership with commercial financial institutions.
Defending privatisation, which has been a thorny
"In some countries, privatisation of public enterprises has resulted in increases in foreign direct investment," he said. "Hence the issue these days is no longer whether or not to privatise, but how privatisation programmes can best be designed and implemented to achieve maximum benefits for the country."
Indications are that NDB will become the first government enterprise to be privatised in Botswana. This will break the rigid structure in the local financial industry where all institutions are either government or majority owned by foreign multinationals.
Last year, Nedbank Capital a subsidiary of South Africa's Nedbank Group, won a P4.4-million bid after beating two other financial consultancy companies, Deloitte and Touche and Cresco Project Finance Limited, that were in the running for the lucrative tender.
Meanwhile, protracted negotiations with International Development Ireland (IDI) for a management contract for the national flag bearer, Air Botswana, remain in limbo after the tentative April 1, 2009 deadline passed without a deal, prompting Cabinet to order the Ministry of Transport to "re-look at certain things".