The Ministry of Finance and Economic Development is still optimistic financially struggling State owned Entities (SOEs) will eventually turn the corner and pay government dividends and repay loans extended to them.
Appearing before the Public Accounts Committee (PAC) on Wednesday this week, Secretary Development and Budget, Grace Muzila – who was standing in for the Permanent Secretary Solomon Sekwakwa – told the committee that they have not given up on these entities.
This was after she was asked why government cannot turn loans extended to financially struggling entities into equities, to which she said they have as the ministry received such requests, and responded positively to some of those requests.
“We have not given up; that is why we haven’t taken that decision,” Muzila told the committee chaired by Kanye South MP Abraham Kesupile.
Some of the entities said to be struggling include the National Development Bank (NDB), Botswana Power Corporation (BPC) and Botswana Meat Commission (BMC) among others.
Muzila told the committee that an amount of P400 million was given to NDB in 2016, with P300 million being a loan while the remaining P100 million was cash injection.
Despite not making profits, Muzila said these parastatals are not broke, adding that for the past year they all the mentioned reported losses.
Answering a question form the committee member Specially-elected MP Mephato Reatile on why something cannot be done about BMC as it keeps on gobbling public money, Muzila said the situation at the Commission will improve in couple of years.
Asked to commit herself on when the situation will get better, Muzila was non-committal, saying this was because of looking at what has to be done. Reatile reminded Muzila that those who have appeared before PAC before have always sang the same song that the situation will get better, but that never happened.
According to the 2017 Auditor General’s report, BMC, as in previous years failed to pay an outstanding balance of P192 million of the loan made from the public revenue. The loan commencement date is said to be 2009 with final redemption date being August 2021.
During the past year, BMC has accumulated a deficit of P770.1 million compared to P535.11 mllion in the previous year.
Muzila said they are currently at a stage where they have to consider the way forward with struggling SOEs, further telling the committee that at the moment the ministry is taking advises.