Botswana International University of Science and Technology (BIUST), Vice Chancellor Professor Otlogetswe Totolo has challenged government to dismantle Botswana Meat Commission and other state owned monopolies and allow for competition.
He said the move will increase efficiency, productivity and enable technology transfer and skills. Citing BMC as an example, Professor Totolo, at the national competition symposium this week, said at its inception the parastatals’ monopoly on exports was justifiable.“It may have been justifiable because of the difficulty at the time, farmers faced in accessing external markets,” said the Professor. Some of the beef standards and quality requirements for accessing European Union (EU) markets include tough sanitary conditions.
Although Professor Totolo applauds BMC monopoly during its early years, the Vice Chancellor bemoans that the intended plans to adhere to standards has partially been achieved through the monopoly system. “But the downside is that supply has not been able to meet demand, even with the 18 196 quota. Yet, we do have players in the market who are able to meet requirements of these external markets,” said Professor Totolo. The BIUST Vice Chancellor believes government can strengthen its role as a regulator.
He said it is inevitable for some SOEs to be reconfigured, and in some cases close down, as they can no longer compete in the market, adding that such developments carry other social ills such as retrenchment or unemployment.
Professor Totolo said monopoly breeds a lot of inefficiencies in production, service delivery and revenue collection, impacting negatively on the business and reducing social welfare. In addition, he said monopoly entities face no competition from anyone else, leading to inefficiency. “In these instances, there is need, to carefully look at the service value chain with a view to introduce competition, raise efficiency and productivity,” said the Professor.
He highlighted that it would be wise to have different actors focused on production, distribution and revenue collection for better focus and specialisation of resources directed at a specific mandate to increase efficiency and productivity.
Professor Totolo also believes there is need for Competition Authority to introduce anti-blocking rules, anti-competitive mergers, harmonise accountability, competitive neutrality, transparency and consistent application rules of subsidy or state aid. Last year, Gantsi North legislator, Noah Salakae told this publication that the country’s meat industry value chain is ‘under siege’ due to export monopoly created through archaic Botswana Meat Commission Act (BMC) of 1965. Salakae said the Act is limiting full participation of farmers in the industry that holds potential to diversify the economy from being mineral resource dominated.
“The Act does not accommodate farmers. The whole thing (meat industry) is run by the minister. The minister issues export licenses periodically, why not have board of governors,” said Salakae, highlighting that the country’s meat industry remains uncompetitive due to government’s restrictive hand on exports.Salakae said the development has led to livestock rearing being a hobby than a business for most people.
Despite reiterated calls for opening up the BMC monopoly, the Commission’s management remains optimistic the parastatal can be restructured and start contributing positively to the national fiscal purse. “We are fully engaged in a diversification strategy to regain China, US through AGOA and Russia is another market,” said Brian Dioka, BMC spokesperson in an interview with Botswana Guardian last week.