Botswana is preparing to overhaul the ownership of state-owned enterprises as tighter public finances and the push for economic diversification expose the cost of a fragmented approach to managing public assets.
Vice President Ndaba Gaolathe said the proposed SOE Ownership Policy would make government a more deliberate shareholder, with clearer performance expectations, stronger governance and closer monitoring of fiscal risks.
The economic significance lies less in creating another layer of oversight than in forcing government to confront why it owns individual enterprises. Under the proposed framework, new SOEs would require a clear economic, strategic or social justification, while existing entities would be reviewed for mandate relevance, performance, fiscal exposure and public value.
That could eventually put poorly performing or strategically marginal enterprises under pressure to restructure, partner with private investors or, where justified, exit state ownership.
The proposal also seeks to separate ownership from day-to-day management. Line ministries would retain strategic responsibility, while a dedicated Oversight Authority would consolidate information on the SOE portfolio and monitor borrowing, guarantees, transfers, operating losses and other potential claims on the public purse.
This distinction matters because fiscal risks from SOEs can emerge well before they appear as direct budget expenditure.
The policy would also require government to identify and fund public-service obligations imposed on commercial SOEs, reducing the risk of enterprises being judged commercially while carrying unfunded social mandates.
For private businesses, competitive neutrality could prove equally important, particularly where state-owned companies compete in commercial markets.
The proposed reforms therefore represent a shift from simply managing SOEs to questioning the economic rationale for state ownership itself. The test will be whether the eventual legislation produces measurable improvements in performance, fiscal discipline and public value rather than another governance framework without stronger commercial accountability.