Transcript PRESENTATION TO STAFF

12th NATIONAL BUSINESS
CONFERENCE
Implementing Privatisation: Emerging issues
and lessons for the future
Kgotla M. Ramaphane
Chief Executive Officer
Public Enterprises Evaluation and Privatisation Agency
Francistown, October 16, 2012
OUTLINE OF THE PRESENTATION
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Privatisation Policy of Botswana
Privatisation Master Plan
Other policy initiatives that have a bearing on privatisation
Privatisation model for Botswana
Key stakeholders in the privatisation process
Privatisation implementation processes
Update on on-going transactions
Emerging issues
Lessons from on-going transactions
Privatisation lessons from Zambia
Conclusions
BOTSWANA PRIVATISATION POLICY
(PAPER NO. 1 OF 2000)
 To facilitate greater private sector participation in the
economy.
 Promote competition, improve efficiency and increase
productivity of enterprises,
 Accelerate the rate of economic growth by stimulating
entrepreneurship and investment,
 Increase direct citizen participation in ownership of national
assets,
 Reducing the size of the public sector,
BOTSWANA PRIVATISATION POLICY
(PAPER NO. 1 OF 2000) …
 Withdrawing from commercial activities which no longer
need to be undertaken by the public sector,
 Broaden and deepen the capital market
 Relieve Govt of the administrative and financial burden
 Privatisation Policy allowed for the establishment of
PEEPA
PRIVATISATION MASTER PLAN 2005
 Objective was to draw up an action plan for privatisation.
 Identified opportunities for private sector participation in
activities of central government and local authorities
 The Plan proposed a two pronged approach….
 Restructuring and privatisation of commercial public
enterprises
 Commercialisation and rationalisation
 Currently reviewing Privatisation Master Plan of 2005
OTHER POLICY INITIATIVES THAT HAVE A
BEARING ON PRIVATISATION
 Public-Private Partnership Policy and implementation
Framework
 Competition Policy and Law
 Citizen Economic Empowerment (CEE) Policy
 Economic Diversification Drive (EDD) Initiative
 Botswana Excellence Strategy: a strategy for economic
diversification and sustainable growth
 Investment Strategy for Botswana
 Botswana National Export Strategy
 Establishment of Regulatory Agencies
 Botswana Communications Regulatory Authority Act passed by
Parliament in July 2012
 Bill to establish Energy and Water Regulator is being drafted
PRIVATISATION MODEL FOR BOTSWANA
 Privatisation in Botswana differs from that of other countries
 Encompasses all measures and policies aimed at strengthening
role of private sector in the economy
 Covers divestiture, public-private partnerships, and outsourcing of
public services
 Voluntary rather than due to external pressures
 Aim is to improve economic efficiency, provide new opportunities
for private sector
 To foster market principles within public enterprises for sustainable
growth and job creation.
 Guided by a policy rather than law
KEY STAKEHOLDERS IN THE
PRIVATISATION PROCESS
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Cabinet and Parliament
Ministry of Finance and Development Planning
Sector Ministries
Public Enterprises
Attorney General’s Chambers
Public Procurement and Asset Disposal Board
Private Sector
General Public
Trade Unions
Media
POLITICAL AND PUBLIC SUPPORT
 Communication Strategy being implemented
 Stakeholders engaged at different levels to facilitate buy-in
and support
 PEEPA has addressed – Parliamentary forum, Local
Authorities; Business Communities; Editors forum and Policy
makers
The Privatisation Process – A systems View
INPUT
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Government
Owned
Enterprises
Non - Core
Services
offered by
Government
Non commercial
Public Entities
PROCESS / TRANSFORMATION
(1)
Program
Development
(Master Plan)
(6)
Monitoring &
Evaluation
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(2)
Project
Funding
(5)
Project
Execution
(3)
Project
Kick - Off
(4)
Project
Appraisal
OUTCOMES
or BENEFITS
OUTPUT
Divested
Parastatals
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Outsourced
Public Services
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Commercialised
Public Entities
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Divest or Outsource or Restructure or Re-engineer!•
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Efficient and
effective
delivery of
Public Services
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Increased
Private Sector
in the Economy
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Increased
citizen
ownership of
national assets
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Broadened
capital markets
Corporatised
Public Entities
Restructured
Public Entities
Information
(studies, reports)
UPDATE ON CURRENT
TRANSACTIONS
BOTSWANA TELECOMMUNICATIONS
CORPORATION
 Implementation being undertaken in 3 stages
 Citizens allowed to trade shares among themselves
 Up to 5 % of the 49% of shares will be allotted to citizen
employees of BTC only
 Board and Acting CEO of Botswana Fibre Networks
(BoFINET) appointed
 Drafting of constitution and relevant documents complete
 Registration of BoFINET in progress
 Transfer of network assets from BTC Ltd to New Entity
NATIONAL DEVELOPMENT BANK
 Processing of NDB (Privatisation) Transition Bill on-going
 Bill to be considered during Nov 2012 session of Parliament
 Incorporate NDB as a Company
 Procure IPO Advisor to assist implement transaction
 Implement IPO during 2013/14
 Undertake a Communications Programme
PUBLIC SERVICES OUTSOURCING PROGRAMME
(PSOP)
 Approved PSOP in March 2011 to outsource Landscaping,
Office cleaning, and Security guarding
 Consultations with staff and unions complete
MoH outsourcing programme
 Phase I –cleaning, grounds maintenance and laundry
services, porter services in referral hospitals complete
 Phase II – non-clinical and clinical services outsourcing has
commenced
 PEEPA and MoH have finalised a five year outsourcing
implementation programme for the Ministry country wide.
RATIONALISATION
BEDIA/IFSC Merger
 BITC Board appointed in February 2012
 The merger has been completed, BITC started operations in April 2012
BPS/BSB Merger
 Merger through establishment of holding company with 3 business
units of postal, courier and banking services
 Botswana Savings Bank Transition Act passed by Parliament in July
2012
 BOCRA Act of July 2012 will facilitate corporatisation of BPS
 Transition Bill for Botswana Post to be considered by November 2012
session of Parliament.
BOTEC/RIPCO Merger
 Merger of BOTEC/RIPCO to establish a new Research Institute
approved: Botswana Institute for Technology Research and
Innovation (BITRI) registered
EMERGING ISSUES FOR EFFECTIVE
IMPLEMENTATION OF PRIVATISATION
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Commitment and support of major players
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Continued legislative and policy reforms
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Financial resources for implementation of transactions
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Capacity building in different areas of privatisation
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Employee support programmes
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Willing and capable private sector
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Increased stakeholder engagement
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LESSONS FROM ONGOING TRANSACTIONS
 Transaction specific legislation
 Approvals at different levels of implementation
 Human Resources issues and the consultation/negotiation
processes
 Financing transactions within limited resources
 Many stakeholders with differing priorities and diverse
expectations
 Building strong stakeholder relationships must be coupled with
targeted capacity building
 Privatisation is a political, commercial and economic process.
 Policymakers and managers in the privatisation process require
capacity to deal with broad dynamics.
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LESSONS FROM ZAMBIA PRIVATISATION
 Privatisation process played a central role in Zambia’s
subsequent economic recovery and rapid growth
 Privatisation imposed by IMF and World Bank
 Driven by Privatisation Act of 1992 which established Zambia
Privatisation Agency (ZPA)
 ZPA autonomy and strong government commitment, led to the
success of the privatisation programme
 250 privatisation transactions completed in 9 years
 Examples of successful privatisation transactions: Zambia Airways was liquidated, resulting in registration of 4
private airlines
CONCLUSIONS
 Progress has been made notwithstanding the challenges
 Implementation still a major challenge
 Concerted effort and commitment by all stakeholders required
 Privatisation provides opportunities for the private sector
 Privatisation can facilitate economic growth and diversification
 Privatisation more relevant in light of the current economic
environment
THANK YOU