SOEs urged to transform and perform
State Owned Enterprises (SOEs) have been challenged not only to be service providers, but also engines of transformation and growth.
Botswana is navigating significant economic challenges, with a heightened urgent need to diversify beyond diamonds, confront unprecedented unemployment, as well as building resilience against global shocks.
Acting Deputy Permanent Secretary in the Ministry of Finance, Batene Matekane said at the SOE engagement on performance monitoring, profitability and governance that in response to current
challenges, government is moving forward under the Botswana Economic Transformation Program (BETP), the country’s most ambitious, execution-focused blueprint.
“The BETP is our national goal to pivot from planning to performance, from ideas to implementation,” he said, adding that the program translates national priorities into bankable, time bound projects with clear key performance indicators, ensuring traction to measurable results.
Matekane further added that within the BETP, SOEs are pivotal, adding that they are not peripheral entities but instruments of strategic service delivery and catalysts for economic transformation to the economy of Botswana.
He further revealed that government is advancing the development of a Modernised State-Ownership Policy, which is expected to clarify the state’s role as a strategic value driven share holder, emphasizing professionalized governance, merit based leadership and commercial discipline.
“It will ensure that SOEs are structured not merely as extensions of government but as dynamic entities aligned with national goals and accountable for performance,” Matekane said, adding that the Public Enterprises Evaluation and Privatization Agency (PEEPA)’s role in the ecosystem is indispensable.
He said through performance monitoring, PEEPA ensures SOEs are guided by clear strategic targets that are aligned to national priorities. Through governance advocacy, it injects credibility and discipline into boardrooms that shape critical decisions. “Without proper monitoring of governance, transformation becomes a rhetoric.” Further, that profitability and governance are not abstract accounting goals, but foundations of national development.”
Matekane further added that profitability allows SOEs to invest, expand and even create more opportunities. In his view, a well-governed SOE builds trusts, attracts investment and drive growth for the nation. He stated that SOE performance remains uneven, with some entities being models of sustainability while others continue to drain scarce public resources.
“This is not sustainable, something must shift. It cannot be business as usual.”
He reckoned that if transformation is to succeed, every SOE must rise, come to the table. “PEEPA is the partner to guide that rise, verify targets, monitoring delivery, ensuring that boards are strong, independent and strategic.”
According to Matekane, in its role, PEEPA keeps the shareholder aware of SOE performance, ensuring risks are identified and opportunities are seized.
“Move from a culture of entitlement, to one of an enterprise. Gone are the days of subventions. We need to commit to the highest standards of transparency and accountability, understanding that we are custodians of public resources,” he said.
He added that profitability would multiply jobs, will activate value chains and stimulate private sector participation, and compete regionally or globally and become proud symbols of Botswana’s economic rise.
Presidential Advisor, Projects, Omphile Sehurutshe acknowledged the difficult journey that SOEs are venturing into, stating that SOEs that were meant to generate profits, should do so in the shortest possible time.
“We are in a time that the word ‘profitable’ is no longer a taboo. There was a time we honestly believed that we should not emphasise on profits in SOEs. The reality is that profitability and customer
value can co-exist.”
Sehurutshe further reminded boards of their fiduciary duties, key to which is the preservation of value. “If we fail at this responsibility, it reflects on us as board members. If SOEs continue to not perform, it reflects on us,” Sehurutshe said, adding that Boards need to lead and ensure transformation of SOEs.
He added that SOEs are run on taxpayer’s money, and if not profitable, it means citizens are paying twice. “First for the tax to run the SOEs and second, to carry the burden of unemployed relatives.
This is unsustainable and unfair and simply cannot continue. Households carry an increasingly high burden of debt because the value that ought to be returned to them is not realized, and the same SOEs come back to ask taxpayers to pay more.”
Sehurutshe said some SOEs hold absolute monopolies, which if transferred to the private sector, they would celebrate. He wondered why SOEs carry such special conditions yet they do not maximise on them. “If same conditions were extended to the private sector, they would thrive. Some would have even grown to be regional and continental powerhouses, yet SOEs are not able to do so.”
He further assured that government is ready to facilitate, from the Office of the President, Ministry of Finance and parent ministries. “Government has taken a posture to respect and facilitate solid and sound professional business decisions aimed at transforming SOEs. Where decisions are well thought, professional, we will respect them if aimed at ensuring that you will continue to be profitable and deliver value to Batswana. Let us get better at execution, and not explanations and strategies.”
According to Acting PEEPA CEO, Ishmael Joseph, SOEs performance shows mixed results across the 16 SOEs, as some are profitable and efficient, while others record recurrent losses and depend on state bailouts. Five of the 16 have generated profit for the last three years consecutive financial years. Two have recorded five consecutive years of financial losses, signaling persistent structural and operational inefficiencies. Others display a combination of profit and loss.
He said identified challenges to profitability is over-reliance on government bailouts, weak governance and accountability, low performance culture, inefficient operations and outdated business and operating models to respond to market conditions, non-commercial mandates, lack of innovation and digital transformation, as well as lack of competitiveness.
He further added that their role among other things, is to help ministries set targets for SOEs. He said in the past, PEEPA was not proactive, but always behind the scenes, waiting for SOEs to develop strategies and for some unfortunately, they would ask for additional refinancing from government, even when SOEs ought to have built structures to ensure sustainability.
“I have heard the president more than twice, stating that some entities will be profitable by the end of this year. PEEPA is here to ensure that indeed, some SOEs will be profitable,” he said.