Eskom And SAA Fiascos Should Be A Warning To Botswana About The Dangers Of Statism

Last week, South Africans were up in arms on social media as the national power provider Eskom rolled out what they referred to as stage 6 load shedding as the country continued to face detrimental electricity supply problems. Prior to that, the national carrier South African Airways (SAA) had been put under business rescue after it had also gone through extended periods of deficient operations which included a strike by the airline staff.

What is the common denominator between Eskom and SAA is— of course— the fact that they are what is referred to as parastatals—companies which are owned and run under the authority of a country's government. Parastatals are common in most African countries, Botswana not being an exception. The national airline Air Botswana, the national power provider Botswana Power Corporation (BPC) and the Water Utilities Corporation (WUC) are just a few examples of the country's parastatals.

Parastatals— if run and managed accordingly—have the potential to not just be symbols of national pride and evoke feelings of patriotism in citizens but also create jobs and contribute towards the betterment of the lives of the country's citizens. The problem, however, is that most parastatals are a far cry from what one would term efficient management. Riddled with political interests and overall lethargy in management, most parastatals are nothing but a waste of taxpayers' money with most of them operating at massive losses and relying on government handouts for operation.

To give just a glimpse of the state of Botswana's parastatals, the national carrier Air Botswana has been failing to run smooth operations for a while now despite being overstaffed with over 450 employees managing a fleet of only three airplanes. On top of that, the airline has been operating at a loss for more than a decade, a factor attributed mostly to the cost of the maintenance of its meager fleet and overstaffing.

Then there is the national power provider BPC which only managed to post its first year of profits in a decade last year. The corporation managed to incur project overruns of over 4 billion pula to build the Morupule B power station which despite being finally operational earlier this year after its initial completion in 2012 was reported to already be experiencing some operational problems a few months back which means more cases of load shedding for citizens.

Last and definitely not least, there is the WUC, the country's water services provider. The corporation is reportedly in debt of almost a billion pula and Batswana from all around the country, especially in rural and remote areas, continue to struggle to have access to safe water sources as a result of poor planning and implementation of projects by the corporation.

What is sad about all these entities which are essentially leeches of the country's public funds is that unfortunately, they are mostly monopolies in their respective areas of operation so the taxpayers really have no choice but to keep pumping funds into them despite the obvious maladministration. If the BPC does not get bailed out, the whole country goes dark. If Air Botswana does not get bailed out, very flew flights can take the country's skies. If the WUC does not get bailed out, the whole country goes thirsty. This situation creates a catch 22 situation for the taxpayers because on one hand yes these entities are wasting public funds but then again, on the other hand, it is better to have an unstable supply of vital services than none at all.

The question now becomes, because we cannot simply cut these perennial loss-makers out of the national budget, what is to be done to improve their standing as business entities? Privatization might seem like the obvious option for most people but in my opinion, it should, of course, be an option but not the only option.

It is not impossible for parastatals to turn a profit even when run by the state as witnessed by the profits some of them were making prior to the tenure of the previous administration. The problem, however, comes when too much political influence is exalted in the running of these state enterprises which consequently leads to them being set up to serve the interests of not the nation but of the chatterboxes over there by the halls of parliament.

Although privatization can counter this problem of political influence in the running of parastatals and also ensure that these enterprises are run by companies who have had many years of experience in the respective sectors hence ensuring efficient of their operations when they take over, it has its own shortcomings. The obvious one is that the core goal of any private company is to turn a profit and although this is good news for its shareholders, it can be detrimental for vulnerable groups in the population. Giving the management of vital utilities like water and electricity to private companies can lead to them exploiting these vulnerable citizens like the poor in order to turn a profit. This can of course still happen even when the said enterprise is a parastatal but the truth is that a government-run entity would be much more inclined to offer welfare services to citizens than a private company.

Private companies, like any other enterprise, can also fail and go under and if they are responsible for providing vital services like water and electricity to the population, their failure can prove to be catastrophic to the lives of citizens because unlike parastatals, they wouldn't have the privilege of taxpayers' bailouts to offer them a lifeline.

Because it is obvious that privatization has its own deficits and hence cannot be the only option to fix the problem of loss running parastatals, the second option would be to reconsider the structure of the management of these parastatals. The lack of accountability for the poor performance of these enterprises only serves to add to the lethargy in management which causes the poor state of their operations. If the executives of these corporations were answerable to stern and effective parliamentary oversight bodies, perhaps they would be more inclined to pull up their socks and improve operations.

As aforementioned, parastatals do have their advantages and benefits and privatization should not be exalted as the only solution to their poor performance and consequent waste of public funds without considering other options. To try to get these public enterprises to turn a profit and effectively serve the nation as they should, there should be a deconcentration of the powers which are responsible for running them. If the state or government is given the sole responsibility of operating them without any effective check and balance measures in place, political influence and eventual mismanagement are bound to seep into their management.