In parliament this week, junior minister for Agricultural Development and Food Security, Kgotla Autlwetse avoided discussing the privatisation of the Botswana Meat Commission (BMC) choosing instead to spark debate of the liberalization of the beef sector.
While specially elected Member of Parliament (MP) Mephato Reatile wanted the Assistant Minister to indicate when government was planning to liberalise the beef sector, he further explained that his real concern was whether there was truth to recent media reports that there are advanced plans for the privatization of BMC.
Autlwetse did not address the privatization and focused the debate on the liberalisation of the industry, telling the legislators that, government has commissioned a study on the liberalization of BMC. The study is expected to end in September 2017.
He said the study endeavours to assess the feasibility of liberalisation on the Botswana beef export market in order to allow other players in the beef industry to participate in the international beef market.
“The findings of the study should inform Government decision on whether or not the monopoly on the export of beef products, live cattle, should or should not be removed,” he said.
The Business Weekly & Review has established that government engaged a tax audit and consulting firm, KPMG as at November last year to conduct the study.
At the same time, The Business Weekly & Review found that a decision has already been taken to privatize the BMC. Minister Ralotsia has been travelling Botswana in what was said to be consultations on the ongoing privatisation. Previously this publication asked him if a decision to privatize did not contradict the liberalization study and policy, and why would government spend money on a liberalization study, knowing very well that BMC is being privatized.
Ralotsia said consultation towards the privatization is on-going and cannot be stopped by the unavailability of a liberalization study, “Those are two unrelated issues”. The Minister indicated further that the privatization process will be kick started immediately after the consultations have taken place. It emerged through investigations that government will unbundle the European Union (EU) compliant abattoir and sell it in bits and pieces.
Spear-headed by Ralotsia, the state has taken a decision to sell a 50 percent shareholding in the Lobatse abattoir, which is the BMC cash-cow. Those in the corridors of power speak of South African wealthy cattle farmers, who are eying the Commission.
The potential investors will be required to inject P2 billion for a 50 percent shareholding, while government will retain the remaining shares. Lobatse abattoir slaughters around 400 cattle every day for export. BMC makes over P1 billion from exporting beef annually. Statistics Botswana shows that, P1.1 billion was made in 2015, while the first and second quarters of 2016 show figures of P880.9 million (excluding the last 3 months of 2016).
BMC head office in Lobatse comprises an integrated complex housing an Abattoir, deboning and cutting plant, cannery, rendering plant and tannery.
The Francistown abattoir which has been non-performing, will be fully disposed of to an interested buyer, but government is willing to negotiate the price since the abattoir is operating at a loss. BMC also operates an abattoir in Maun, a red-zone area that is on foot and mouth alert. Government intends to retain the Maun abattoir in order to have oversight and control over movement of cattle in and out of the red zone area to curb the transmission of FMD.
Government, as part of its changing policy in the meat industry will also establish an independent Meat Board Authority, an organization that will be an equivalent of the Competition Authority, but focusing instead on the beef sector, according to sources, to ensure fair play within the soon to be privatised sector.
Besides owning three abattoirs in Botswana, BMC has cold storage facilities in South Africa with marketing subsidiaries in the United Kingdom, Germany, Holland and South Africa.
Interestingly the debates in Parliament side tracked legislators, who were caught in debating the liberalisation, which may not see the light of the day, to the detriment of privatisation. In parliament however, Ralotsia’s comments on their face appeared to contradict those given in his response to this publication previously when they engaged him in the same matter. In the national assembly he said if indeed the Government had made a decision to privatize there would be have been consultations regarding the matter long before a decision was actually taken. Ralotsia advised Salakae to always position himself to be able tell between a decision and a proposal.
UDC MP for Ghanzi North Noah Salakae said if indeed there were plans to sell or privatize BMC, parliament ought to have been aware of the plans. He said the point being no one in parliament has been informed of a liberalisation Act for the industry and further that he was only aware that the Lobatse meat Commission privatization had been put to a complete halt when the cabinet members said Christian De Graff, then as the accountable Minister, was seeking to make his friends richer by selling to them.