The Botswana Meat Commission (BMC) monopoly, in place since before Botswana gained its independence is coming to end following a decision by cabinet to approve several reforms in the country’s beef sector.
The Cabinet recently finally agreed to reform Botswana’s beef sector after farmers called for the government open up the market to allow more players into the sector, a plea that has dragged on for the past two years. The reforms will see the introduction of the beef industry regulator.
In a deal that is yet to be concluded pending consultations with the relevant stakeholders, Cabinet has resolved that the BMC will transform from being a corporation to a limited company. The Government is to retain 50 percent of BMC stock, while the other 50 percent will go the to farmers, it’s been revealed. The two other BMC abattoirs (Francistown and Lobatse) are to be privatised and cease to be part of the BMC.
The BMC has all along been protected from export competition, with several privately owned and local council abattoirs, as well as a large number of local butcheries that undertake slaughter being restricted to the domestic market only. The BMC Act gave the BMC monopoly over the export of beef and related products and also prohibited the export of live cattle. The EU quota – which is specific to Botswana – also means that the BMC has always faced little to no competition in the EU from other beef exporting countries. The monopoly and all these privileges have done little to nothing to avert the BMC’s relentless woes.
Spotlight on some of the BMC’s inefficiencies
- A special Parliamentary Committee consisting of eight legislators established to investigate Botswana’s declining beef industry found that virtually all BMC CEOs were selected from a pool of retired civil servants, not based on merit or commercial experience.
- The committee also highlighted poor governance within the BMC as well as bad blood between the board and management. It discovered inefficiencies stemming from overstaffing, declining productivity and soaring marketing costs, among others.
- The BMC was declared financially insolvent over the 2009-2012 period due to what’s believed to be poor financial controls.
- The Committee also found “strong circumstantial evidence of the under-pricing” of Botswana beef in the EU, South Africa and domestic markets over the period. Recommendations made by the committee were reportedly never considered.
- A report titled ‘Overview of BMC 2013-2016’ accused some BMC executives of corrupt practices including working with some unnamed third parties to ensure that the BMC is seen as an unprofitable venture, with some suggesting that there was a deliberate move to ensure that the BMC remained unprofitable and does not identify new markets.
“If managed properly, BMC is a sustainable business that can go far in empowering and enriching communal farmers in Botswana. The country as a whole is being deprived of the values and sustainable incomes that could be available through a thriving cattle industry under the leadership of a viable and profitable BMC,” the report stated.
The government has so far resisted Botswana farmers’ calls to liberalise the beef industry. Since independence, the government through the BMC, has been the only entity authorised to run an abattoir that exports Botswana beef. The idea of the BMC’s liberalisation first came about in 2013, when the Ghanzi Farmers Association garnered support for the motion at the Otse Meeting of Farmers Associations. This resulted in the Letsema Resolution, which appealed to the government to bring to an end the BMC monopoly. Calls to mind another state-owned entity that the government could do well to let go of… Air Botswana! ]