Underperforming Parastatals to be Axed
Honourable Minister of Finance and Economic Development- Dr. Thapelo Matsheka has revealed the government’s intentions to close unsustainable parastatals, and privatize some, this move by the government is to cut expenses due to financial constraints.
Below are government parastatals and State-Owned Enterprises’ (SOEs) performance as revealed by Minister Matsheka during his budget speech;
Botswana Telecommunication Corporation
Botswana Telecommunications Corporation Limited registered a decrease of thirty-four point four Percent (34.4%). Net profit of P106.4 million in 2019/2020 was made compared to P162.1 million recorded in 2018/19.
Water Utilities Corporation
Water Utilities Corporation declined by sixty point four percent (60.4%). P75.6 million was recorded against P190.9 million in 2018/19. The loss incurred is attributable to expenditure to cover water treatment and distribution as well as an impairment loss on development expenditure.
Botswana Housing Corporation
Botswana Housing Corporation recorded an increased profit of P49.3 million, against P16.7 million recorded in the previous year. This result is due to increased revenue and rental income.
Botswana Power Corporation
Due to the poor performance of Morupule B power station resulting in increased power imports, Botswana Power Corporation made a net loss of P1.4 billion in 2019/2020. Net profit of P201.9 million was recorded the prior year.
BotswanaPost recorded a net loss of P45.0 million, compared to a net loss of P0.95 million in 2018/2019; BotswanaPost’s loss was due to a rise in other operating expenses, and comes even after government paid substantial grants to BotswanaPost to support the post office network nationwide
Botswana Agricultural Marketing Board
A net loss of P40.7 million, compared to a net profit of P70.8 million in 2018/2019 was recorded by Botswana Agricultural Marketing Board (BAMB). The loss is attributable to an impairment loss and substantial increase in cost of sales.
“Mr. Speaker, these results indeed illustrate the critical importance of restructuring the SOEs sector, including potentially closing down perennial loss- makers, as we cannot continue bailing out these companies from our scarce tax revenues.” Matsheka declared.
As it stands, most of the loss is recorded by enterprises that provide essential services. Now the question remains, ‘which parastatals/SOEs will be facing the axe, and which will be privatized?’ Will the essential services now be provided by private companies? Only time will tell.