Africa-Press – Botswana. Botswana’s parastatal sector comprises 63 entities, of which 16 are designated as commercial entities expected to be profitable.
Minister of Finance and Vice President, Mr Ndaba Gaolathe updated Parliament on the financial performance of the entities. He revealed that only five had maintained profitability for three consecutive financial years. The entities that had achieved this are Botswana Housing Corporation (BHC), Botswana Vaccine Institute (BVI), Botswana Fibre Network (BOFINET), Botswana Savings Bank (BSB), and Mineral Development Company Botswana (MDCB).
However, not all parastatals have been consistent winners. Mr Gaolathe noted that Botswana Oil Limited and the National Development Bank recorded losses for three consecutive years but had recently returned to profitability in the latest financial year. He emphasised that the long-term sustainability of ‘these institutions will depend on improved risk management and continued fiscal support.
On the other hand, he said Botswana Agricultural Marketing Board (BAMB), Botswana Post and the Okavango Diamond Company (ODC), continued to show financial instability. He said Botswana Post’s loss in the 2023/24 financial year stems primarily from its social obligations while ODC’s performance remained vulnerable to global diamond market volatility.
Mr Gaolathe said BAMB’s performance has been inconsistent and dependent on successful commercialisation of its strategic goals. He said Botswana Power Corporation (BPC), Botswana Meat Commission (BMC), Water Utilities Corporation (WUC) and Botswana Development Corporation (BDC) remained under severe fiscal pressure.
Mr Gaolathe said both BPC and WUC struggled with structural issues, including infrastructure debt and non-cost effective tariffs. He said the profit reported by BMC in the 2022/23 financial year was largely attributed to a once off asset revaluation, adding that its operational performance had been weak.
The minister said the most concerning was that the BDC portfolio underperformance threatened its core mandate as a Development Financial Institute. Mr Gaolathe said Botswana Railways (BR) and Air Botswana had recorded five consecutive years of financial losses, signalling persistent structural and operational inefficacies. He said their continued reliance on public support was fiscally unsustainable and reflected a misalignment between mandate and operating models.
Also, Mr Gaolathe said government was looking to advance the unbundling of BR into infrastructure (below rail) and operations (above rail), to facilitate a more robust and effective rail sector ecosystem. He said the government was also looking to introduce a potential strategic equity partner into Air Botswana to restore its commercial viability.
The minister said these reforms were critical in re-orienting BR and Air Botswana, towards commercial viability and private sector investment readiness. He said while definite projects remained premature this early in the financial year, government was confident that its comprehensive governance reforms, alongside the envisaged strategic intervention would drive the recovery of key commercial parastatals.
The minister said these reforms were designed to enhance financial stability, operational efficiency and corporate governance of state owned enterprises. He further said BAMB was expected to benefit from commercialisation initiatives and potential Public-Private Partnership (PPPs), aimed at improving market competitiveness.
The minister also said the BMC was earmarked for restructuring through a strategic joint venture intended to revitalise operations and attract private investment. He said WUC and BPC were prioritised for debt restructuring, infrastructure efficiency and generally improved strategy upgrades to address persistent operational deficits.
The minister was responding to Maun West MP, Mr Dumelang Saleshando who had asked the minister to state the number of parastatals, which consistently generated profit for the past three consistent financial years. He also wanted to know those that have never generated any profit in the past five financial years, as well as those expected to make profit by the end of the current financial year and to provide a list of such parastatals.
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