5 February 2018

Botswana: State Enterprises Performance Mixed Bag

Gaborone — State-owned enterprises (SOEs) exist to support government's development efforts hence their performance is critical in achieving government's broad development objectives of boosting economic growth.

Government, like any other shareholder, expects a return on investments in some of these organisations.

It is therefore important that these organisations are held accountable for the public resources entrusted to them by requiring them to provide a minimal return on capital and contribute to economic growth and employment creation.

Presenting the 2018 budget speech, Minister of Finance and Economic Development, Mr Kenneth Matambo said the performance of state-owned enterprises was filled with ups and downs in 2016/2017.

Among those that registered a positive performance during the year are Botswana Telecommunications Corporation Limited with a net profit of P237.3 million compared to a net loss of P370.8 million in 2016.

Botswana Housing Corporation recorded a net profit of P48.5 million in 2017 compared to P27.9 million in 2016 while Botswana Communications Regulatory Authority had a net profit of P50.8 million in 2017 compared to P43.6 million in 2016.

Botswana Savings Bank (BSB) recorded a net profit of P15.5 million in 2017 compared to P12.8 million in 2016.

Minister Matambo further said some of the state owned enterprises that made losses during the period under review include Botswana Meat Commission with a net loss of P229.7 million in 2016 compared to a net loss of P332.6 million in 2015.

He said the profit realised in 2015 was due to government cash injection of P600 million.

The National Development Bank also recorded a net loss of P162.2 million in 2017 compared to a net loss of P21.2 million in 2016.

Botswana Power Corporation registered a net loss of P140.2 million in 2017, compared to a net loss of P99.6 million in 2016.

Water Utilities Corporation on the other hand recorded a net loss of P137.6 million in 2017 from a net profit of P199.4 million in 2016, while Air Botswana improved its performance with a net loss of P12.4 million in 2017 compared to a net loss of P86.1 million in 2016.

Minister Matambo said there were varied reasons for unsatisfactory performance by some of the state owned enterprises during the period under review.

For BPC and WUC, Mr Matambo said there was a misalignment between the levels of tariffs charged relative to the mandates of these two institutions.

He said to address the issue, the current water tariffs charged by WUC were gradually being aligned with the water treatment and distribution expenses. He added that government would review the BPC tariffs with a view to maintain a sustainable tariff structure that balanced the need for cost recovery in the provision of power on one hand and containing the costs of power in the other.

He said the latter was critical given the role of electricity as an input into the production of goods and services in the economy.

The minister highlighted that the performance of other state owned enterprises was affected by continued difficult trading conditions within their respective sectors during the period under review.

Source : BOPA

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