Reducing the presence of state-owned enterprises and promoting Botswana's private sector
The Government of Botswana concluded that the share of the public sector in the economy had become excessive. Although it was not the deliberate policy of government to have such a dominant role, the weak private sector presence at the time of independence required state intervention to initiate a number of functions in the public interest. Over the years, these have extended to various sectors of activity with the result that the public sector had grown too large to be managed effectively.
The government believed that such a dominant state presence was no longer necessary and the privatisation of certain activities would contribute towards right sizing and rationalising the public sector and diversifying the economy. The transfer of ownership or operation to the private sector would allow market forces to better signal the allocation of resources in the economy, thereby improving competition, productivity and efficiency.
However, the means by which this privatisation programme would be carried out, and its sequencing, was not clear. Therefore the Government of Botswana in 2002 asked us to help its privatisation agency, PEEPA, prepare a privatisation master-plan and pull together an overall privatisation programme.
The core objectives
- Compilation of a data-base on public enterprises and the potential for privatisation
- Development of criteria for selecting candidates for privatisation
- Preparation of a privatisation sequence plan
- Preparation of privatisation options for selected enterprises
- Identification of public services for contracting-out
- Development of various implementation frameworks or process guidelines for contracting out public services; and
- Pulling together the above elements into an overall masterplan
Our team carried out an extensive analytical and consultation exercise and created the masterplan, which was adopted by the government as its guide to action in this critical area.