Botswana is set to privatise for the first time, a state-owned enterprise with the public offering that will see 352 million shares of the Botswana Telecommunications Corporation Ltd (BTCL) being sold at one pula each.
“We plan to launch the IPO before the year ends. We have also requested the Botswana Stock Exchange (BSE) for an extension of the IPO period from the normal four weeks to eight week so as to give Batswana more time to purchase the shares which are reserved for citizens only,” Botswana’s communications minister Tshenolo Mabeo told Reuters.
Botswana, a landlocked country in Southern Africa used to be one of the poorest countries in the world in the late 1960s, but it transformed itself into one of the fastest-growing economies. But as privatisation became widely promoted as a tool to improve economic performance in developing countries and transition economies, Botswana introduced a privatisation policy in 2000, and in 2005, a Privatisation Master Plan. The southern African country also adopted a Competition Policy in 2005, which provides a framework that integrates privatisation into a strategy for promoting a dynamic market-led economy. That year, 27 parastatal enterprises were listed as potential candidates for privatisation but none has has been successfully privatised. However, regardless of low private participation in its economy, the diamond-rich country has led sub-Saharan Africa in Human Development Index and Prosperity Index for years.
Although, there has been questions on whether strengthening the private sector will not have a negative effect on the strength and nature of the existing strong developmental state, Bashi Mothusi and Kenneth B. Dipholo argued in a 2008 article that the government’s cautious and pragmatic approach to privatisation, coupled with the fact that privatisation in Botswana is embraced voluntarily and not imposed by lenders as a condition for financial assistance, will ensure that privatisation improves the country’s economy.
Botswana’s Public Enterprise Evaluation and Privatisation Agency (PEEPA) said it had valued BTCL at 800 million pula ($72 million). The company’s shares was split into 800 million units valued at one pula each.