Privatization, in a narrow sense means a partial or full transfer of ownership of a public enterprise to private buyers, through the sale of asserts of the enterprise or shares representing those assets.
Privatization, in a broad sense occurs when some or all the shares in a parastatal company are sold to individuals and companies in the private sector. But it also occurs when, for instance, no shares in public enterprises are sold, but private companies are allowed to compete in the provision of goods and services which were earlier reserved by law for government or public enterprises.
Reasons for privatisation in Botswana are;
- It is a reform programme aimed at diversifying the economy
- To create opportunities for citizen entrepreneurship
- To improve efficiency in the delivery of public services
- To reduce government administrative and financial burden
- It will broaden the capital market
- It will also broaden the local skill base
- POLICY FOCUS – Governments delivers well because it focuses on its core mandate of strategic policy direction and implementation.
- LESS RISK – Lessened Financial and Administrative burden on government therefore money can be channeled to other national needs such as education, health and poverty eradication programmes -Very minimal reliance on government.
- SERVICE DELIVERY – Improved service delivery in the public service
- REVENUE – More tax income from operations that were generic cost-centers! More FDI in-flows in cases of IPOs and SEPs
- IMPROVED EFFICIENCY – Empowered citizens – decision-making hierarchies shortened as the long institutionalised consultations would be cut to more cost-effective and result-focused models.
- Strengthens the role of the private sector in the economy.
- Private companies are profit oriented and Government is not, therefore the scenario will breed business battles for improved services.
- Very key to innovative ideas.
- COMPETITION – Discourages monopolies – BTC will have to compete with e.g Mascom and Orange – value for money for customers.
- Opportunity for Batswana to entrepreneurship through ESOPs and MBOs – citizen entrepreneurship will grow. Batswana entrepreneurs will now be able to operate more meaningful businesses that touch their communities timely; stimulated by competition and less dependent on government to improve sectors!
- OUT-SOURCING: Citizens will enjoy localisation by home-bred businesses that may compete amongst themselves, thus improving service levels across sectors such as in out-sourced activities. Activities such as cleaning services, gardening and security for government will be owned by citizen companies.