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Thursday 18 July 2019
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Game-changer

IMG_5985 Kavekotora

….Jooste unveils new governance model

Parastatals play an intermediary role by acting as a link between Government and the private sector, but in Namibia the link is non-existent because of the precarious state of affairs in the SOE sector. The manner in which parastatals have been operating in recent years has forced the state to consider widespread reforms in order to avert a governance calamity and continued wastage of billions of taxpayers’ money. The Ministry of Public Enterprises yesterday unveiled its Hybrid Governance Model for local parastatals. The ministry said the need for a new model because the Dual-Governance model that was in use all along is an “obvious failure”. Codenamed the “gamechanger”, Minister Leon Jooste said the new system will ensure consistent oversight, monitoring of financial information, removal of conflict of interest, efficient communication, reduce reporting layers and ensure accountability. Under the new model, commercial public enterprises will resort under Jooste’s ministry.

Air Namibia, Epangelo Mining Company, Meatco, Namibia Airports Company, NamPort, TransNamib, Namibia Wildlife Resorts, NamPower, Roads Authority, Roads Contractor Company, NamPost and Namcor are some of the commercial enterprises.
As for the non-commercial enterprises, Jooste said under the new model they will continue to fall under their respective portfolio ministries. “While ultimately accountable to the Portfolio Ministry, this category of public enterprises will still adhere to the public enterprise ministry’s generally accepted common principles of good corporate governance and reporting as well as remuneration guidelines,” he said. He added that the ministry is hopeful that the guidelines translates into increased effectiveness and efficiencies. Whether all these wishes will manifest, only time will tell. “I am convinced that the Hybrid Governance model will provide the MPE with the optimum institutional and organizational infrastructure to reform our public enterprises without escalating cost,” said an optimistic Jooste. In order to ensure that civil servants adapt to the new model, Jooste said: “Human nature dictate that people are resistant to change which is why a dedicated professional change-management process will now be implemented to lead the change among various stakeholders, in particular the public enterprises.”

Regarding political interference in parastatals, Jooste conceded that the practice existed, but was quick to point out that things will be different from now on because it-to a certain extent-contributes to unwillingness on the part of professionals to join SOE boards.
“We know that professionals are wary of their reputations and therefore some would not want to risk it. We are however hoping for a sound corporate environment in which to operate,” Jooste said. The ministry’s permanent secretary Frans Sheehama said interference from the political heads in the affairs of parastatals is mere “guidance”. “Parastatals may go astray if they are not guided, hence we need to guide them to do what the nation wants. We are there to make sure that public money is kept safe,” Sheehama noted.  He also dispelled claims that those connected to Swapo Party gets preferential treatment when it comes to board appointments. “This is not the case, that is why you see that when we advertise we invite all interested Namibians to apply, and in some cases we might even go for foreigners when we need specialized skills,” he said.

There are currently 72 listed SOEs in the country. Jooste said amendments will be tabled in the near future to ensure that the establishing Acts of the parastatals are in line with the requirements of the newly-adopted model. “This model is the obvious next step in the evolution of the Namibian Public Enterprises landscape and it leaves room for further evolution and refinement if the need arises,” he said.  Jooste however indicated that parastatal reforms will only be possible if the most appropriate institutional infrastructure is implemented. Parastatal reforms have been on the cards for years, seeing that many sit on valuable assets, which, in many instances, represent dead capital. This prompted Government to investigate how to better leverage these assets to reduce the burden on the national budget. The situation does not only have the public worried, but also Jooste. “It is worrying that most of the non-performing enterprises are those in the commercial sector, not that others are not important,” he said.




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