The Botswana Government’s continued involvement in the world of business which has seen the formation of more parastatals over the years , has irked the Botswana Confederation of Commerce Industry and Manpower (BOCCIM), the country’s defacto chamber of commerce. BOCCIM has in the past condemned this practice.
In 2013 Gaborone City Council announced plans to set up a company of which three names were suggested though it had yet to identify its area of interest. The main
Kweneng District Council also floated a tender calling for expression of interest to serve on the Board of Kweneng District Ventures Company; a company set up by the Council to make investments in various fields. Central Government has in recent times set up the National Oil Company and Okavango Diamond Company. BOCCIM and a University of Botswana Academic have criticised these moves saying it goes against government stated objective of a private sector lead economy.
BOCCIM says they believe that the business of the state including local government is to make polices for private firms to thrive.
“BOCCIM opposed the formation of state owned companies like Okavango Diamond Company and National Oil Company. Short of crowding out the private sector, these companies provide services that can be provided by private firms,” BOCCIM Director of Policy and Advocacy Dichaba Molobe said.
He emphasised that the important business of the state is to regulate the activities of private firms. “From this standpoint, it is patently obvious that the state at either local or national level cannot be both regulator and player. Another important hall mark of good policy making is to assess the neutrality of the move by local authorities. Will the formation of companies undermine transparency and fairness in the awards of local contracts? Will it not lead to a distortion of the market? It is a no brainer that local authorities will not be able to award contracts in a transparent and unbiased manner. Therefore the formation of companies would undermine policy neutrality,” he said.
As far as BOCCIM is concerned the formation of companies by local authorities is premature. “BOCCIM expects a robust debate on the formation of companies. Until that discussion takes place, we don’t expect local authorities to proceed with formation of companies,” he added.
UB Corporate Governance and Management Lecturer, Dr Tebogo Magang shared BOCCIM’s sentiments saying he fails to understand what the state/local authorities want to achieve in setting up companies.
“This brings in questions of how a country can be a private sector led economy when the state competes with the private sector. Government is going against policies that it has come up with and this development might kill the private sector. They are now contradicting themselves and are even going against attracting foreign direct investment. We are becoming communists.” expressed Dr Magang.
He went onto to add that in a state company, the Board of Directors are appointed by the Minister who then the Board reports to him/her and this will bring about transparency issues and poor governance. As a result, the market will be flooded with mismanaged institutions.