Feb. 12, 2021


2 min read

The plight of state corporations

The plight of state corporations

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THERE is war of words that has been escalated to the legal battle in the courts of law involving top officials of the state-owned Water and Sewage Company (WASCO) where the board of directors, the CEO and allegedly the top government officials are at loggerheads over political correctness, appointment or propinquity of the CEO, Mr Futho Hoohlo.

The legal battle within WASCO as a parastatal is just an ice on the cake regarding politics within all parastatals in Lesotho. What is surprising is that the bone of contention at WASCO has nothing to do with service delivery; nothing to do with performance or misconduct but political correctness.

By politics we mean issues pertaining to government allegedly wanting Mr Hoohlo out of the parastatal at all costs according to him or politically motivated state conventions that have been undermined according to the board of directors.

There is no mention of poor status of WASCO infrastructure and service delivery which have been persistent over the years, before Mr Hoohlo’s, during Hoohlo’s tenure and post Hoohlo’s tenure. That does not seem to be the concern of the government appointed board.

The consumers of domestic, industrial and agricultural water have complained for years in vain and they have no power since this is a parastatal although it is fully bankrolled with the peoples’ taxes.

The solution to this parastatal and others experiencing the same problem is privatisation so that they can be directly in the hands of the public where the board will be responsible to the consumers, where consumers will have power over the standard of service they require from the business.

As water is an essential product, the government may decide to become a minority shareholder so that it may have representation in the board of directors where decisions are made.

The solution to the poor WASCO infrastructure and poor delivery of service to the consumers is the involvement of private capital and expertise who will be motivated by their desire to see success of the company and its profitability.

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It’s high time government thought of full-scale privatisation of all state-owned companies in order not only to reduce the direct demand for government resources but also to generate additional revenue to government by receiving compensation on privatisation, by reducing conflicts between public sector regulatory and commercial functions which are at stake in the WASCO saga.

By privatising, the government would be broadening and widening the base of ownership in the economy of Lesotho.

In the private sector, unlike in government, decisions are made on the basis of efficiency and profit. Efficiency means satisfactory service delivery to the consumers while profit means ability and motivation to provide such service on time.

Parastatals in Lesotho fail because politicians or their appointees make decisions that further their political interests and not that advance the business interest of the industry.

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