Gaborone: The proposed merger of the International Financial Services Company (IFSC) and the Botswana Export Development and Investment Agency (BEDIA) has finally been approved by Cabinet. 'We cannot comment on the time frame yet, but the Bill has been approved by Cabinet and was published in the Government Gazette of 1st April 2011,' said Boniface Mphetlhe, Deputy Permanent Secretary for Industry in the Ministry of Trade and Industry.
He said the Bill will be presented to parliament at its next sitting in July; however some of the processes such as job profiling and organisational structure are still ongoing. The exercise was expected to be concluded by Monday 18thApril.
Senior government officials contend that government does not intend to retrench staff. 'Staff requirements of the new entity will be determined by the Job Profiling and Organisational Structure,' said Mphetlhe.
It is still not clear who will lead the merged entity: former Education Minister and present BEDIA CEO, Jacob Nkate, or IFCSC CEO Allan Boshwaen. 'Upon completion of the merger process, government recruitment procedures will be followed in the appointment of the CEO of the new entity,' Mphetlhe observed.
The new parastatal organisation will be named the Botswana Investment and Trade Center. It is expected that the rationalisation will lead to improved use of natural resources by ensuring effective service delivery, eliminating duplication and harnessing synergies and improving policy coordination, whilst also enhancing shareholder oversight.
'The regulatory frame work as crafted will ensure that the two merged entities continue implementing their mandates effectively and efficiently,' stressed Mphetlhe.
A task team was established in March 2010 to manage the implementation and change process. It included representatives of BEDIA, the IFSC, the Ministry of Finance and Development Planning and the Public Enterprises Evaluation and Privatisation Agency (PEEPA).
The IFSC mandate is to establish and develop Botswana as a globally competitive financial and business service centre; similarly BEDIA promotes the development of export markets for Botswana produced goods.
'From an efficiency perspective if two organisations are pursuing a mandate which overlaps, it makes sense for them to rationalize and look at areas of duplication,' said Dr Grace Tabengwa, Research Fellow at the Botswana Institute for Development Policy Analysis (BIDPA).
She said, 'Two institutions running parallel mandates haves resource implications; for example, you have a larger wage bill to deliver mandate.'
Tabengwa however acknowledged that if you have two people doing a similar job, retrenchment is likely. 'Retrenchment is sometimes unavoidable when you are trying to pursue efficiencies in a big unwieldy parastatal.'
She added: 'There is also a possibility that some maybe offered packages.'
Tabengwa believes the absence of a clear regulatory framework is a concern. 'There is need for a regulatory framework to ensure the smooth operation of the new entity and to ensure that transition into one entity is effectively handled and managed,' he observed.