AS PARASTATALS MERGER BEGINS
SPEDU was yesterday briefed of it’s closure ahead of 12 more other parastatals. But as the momentum to merge them gains traction, concerns about what is anticipated to be the biggest shedding of thousand jobs grow tandem.
As the merging of 12 parastatals that gets underway to rationalise the bloated state sector as part of President Mokgweetsi Masisi’s incisive reforms, there are concerns that massive job losses will be the unpleasant concomitant.
The Minister of Trade and Industry Mmusi Kgafela met with the Board of the Selebi-Phikwe Economic Diversification Unit (SPEDU) to brief them on the plan for collapsing the organisation.
12 into five
In an address in April this year, President Masisi revealed that Cabinet had approved plans to merge the Citizen Entrepreneurial Development Agency (CEDA) with the Local Enterprises Authority (LEA) and to collapse SPEDU, Botswana Investment and Trade Centre (BITC), the Special Economic Zones Authority (SEZA) and Botswana Tourism Organisation (BTO) to roll them into one parastatal.
Twelve of these will be merged into five while two will be wound up and their functions transferred to various government departments.
In yesterday’s meeting, Minister Kgafela is said to have apprised the board of a request for a six-month extension of the exercise to find a consultant who will conduct the merger operations because the organisation does not have the capacity. He is said to have also discussed the plan to prepare a budget to pay such consultants.
Terms of reference
Insiders say the government is aware of the need to be transparent about the processes of engaging the consultant to avoid a repeat of the mess that transpired at BCL Mine with its liquidators. A source who attended the meeting says the trade and industry ministry is completing the Terms of Reference that will guide the comprehensive merger of the four organisations – SPEDU, BTO, BITC and SEZA that will be handed to them this month.
However, as the process to start gains momentum, concerns about job losses have grown in tandem. This publication has established that 150 employees are likely to be laid off because the new frameworks and mandates will render some roles redundant. It is anticipated that these will be the largest level of job losses en bloc since the closure of BCL Mine at the end of 2016 when an estimated 6 000 were rendered unemployed overnight.
To reduce overlaps
Upon its formation subsequently, SPEDU promised to create over 6 800 jobs in 36 months by resuscitating the economy after the collapse of BCL Mine. However, the figure for the combined job losses when the 12 parastatals merge are yet to be established.
President Masisi has said the rationalisation of State-Owned Enterprises (SOEs) is to ensure optimum utilisation of state resources, reduce public expenditure, reduce overlaps and duplications, and ensure effective and efficient service delivery through synergies. Last year, the Minister of Finance, Peggy Serame, said there was a pressing need to decrease subventions to parastatal by P60 million from P4.08 billion in 2021-2022 so as to restore the fiscal budget.