Some Aspects of the National Budget: How do we go about it Madam Minister?

Part 3

In our last article, we discussed the issues relating to knowledge- based economy to the core, basic level in the context of our previous migrant labour to South Africa, the United Kingdom, and South Sudan. We lamented that some constructive initiatives fail because their promotions are characterised by ambiguities and obscurities that unduly reduce close stakeholders’ participation in the development. We further asserted that the examples of labour migration to the above three ( 3) countries were an example of knowledge- based economy except that some of them were a lower grade cadre, say those who migrated to South Africa.

In this article, we will start by winding up the discussions in the last article. We believe that knowledge- based economy includes the situation where the human capital development is geared towards the development and harnessing of the human natural gifts to make them ready for any occupational employment, consultancies, and any other activities in economic development. However, the problems characterising this issue are mostly attitudinal; people assigned to implement and execute these initiatives are more of the bosses to stakeholders than public servants. If we may give examples, procurement in government and state- owned entities policies supporting citizen- owned businesses are clearly articulated by the government. However, when it comes to the implementation and execution of these policies, they discriminate against the very Batswana businesses they were meant to assist, especially small ones, for example pitching the requirements for tendering by non- value- added items including the prerequisites of long- time experiences.

Our comments in these aspects of the budget will cover the following: reduction and effective management of the government wage bill; reducing subventions to commercial state- owned entities ( SOEs) and reducing revenue support to local authorities. We would like to express our agreement with the Minister for the reduction of subventions to commercial SOEs. However, we do not agree with a selective approach to this change of support to commercial SOEs. It should be noted that the mandate of SOEs is the same irrespective of the type of their financing and methods of incorporation. As a reminder, their mandate is to implement and execute policies of the state to provide service to the electorates or citizens. Based on that, their expenditure monitoring and evaluation should be subjected to the same scrutiny. By way of a reminder, SOEs have been incorporated in three ways as follows: There are those that have been incorporated or corporatized by a special Act of Parliament which are commonly known as state corporations. These types of organisations are financed through the initial financial seed and, subsequently, supported through the annual fixed assets and revenue budgets. These organisations provide service to the public at subsidized fees and/ or prices, for example, Botswana Power Corporation ( BPC), Botswana Examinations Council, etc. Another type of these organisations are companies limited by guarantee. At their formation, the government pledges or guarantees that in the event that the company dies or is liquidated, she will meet all the expenses of its burial including those that it owes. The government then, equally, provides a financial seed for the commencement of the business of company and the subsequent annual fixed assets and revenue budgets. These companies like the corporations registered by a special Act of Parliament are there to provide services to public and also to provide the enabling environment for ease of doing business.

The Companies Act provides that these companies should dispense with the suffixes “( Proprietary) Limited for a private company and “Limited” for a public company, examples being, SPEDU and PEEPA, etc. The last type of these organisations are companies limited by shares. The government starts this company by buying a paper( s) costing a certain amount divided in the form of units of shares. In the event the company incurs losses during any particular year, that situation has the effect of eroding the capital of the company. In the event it realises profit, it either refinances itself with that profit or partly refinances itself and partly declares dividends or declares the whole profit as dividends to the government.

In the category of the company limited by shares, the government has also jointly with the public invested in some companies, for example, Botswana Telecommunications Corporation Limited, which is also a publicly listed company.

Due to the fact that these organisations, equally, face the peculiarities, imperfections, and the harsh realities of the market like other privately owned companies, public companies, foundations, not- for- profit companies/ organisations, for the purposes of the ultimate accountability, they should be subjected to all stages of oversight including steering for the formulation of strategy, overseeing preparation and approval of policies, carrying out oversight and monitoring and ensure accountability to the main stakeholders, especially the government.

In the next article, we will advise how financing should be structured to induce effective oversight and accountability to stakeholders. We would like to convey our unreserved gratitude to our readership.