For many years, Namibian taxpayers have been in the dark as to the number of state-owned enterprises they were funding because Government has been giving all sorts of figures ranging from 72, 90 to 98.
The media and research institutions have been forced to rely on their own counts in the absence of official numbers. The situation persists despite taxpayers forking out billions to keep parastatals afloat.
According to an IPPR publication on SOE Governance in Namibia: Will a Hybrid System Work?: “If citizens do not know how many companies they own – let alone their names, functions and details on their performance – it is impossible for them to know how SOEs are doing.”
The publication notes that a 2013 Government Gazette put the number at 72 while this year, the Ministry of Public Enterprises’ website said the number is over 90 and later changing the text to 98 although only 43 were listed at the start of this month.
The research entity also notes that out of 62 SOEs contacted, 44 had no annual reports on their website.
“A further nine websites only had report from 2012 or older. Direct requests to SOEs without reports on their websites yielded only a handful of positive results, often severely outdated,” IPPR report reveals.
Minister of Public Enterprises, Leon Jooste, in response to a question posed by this publication on the issue yesterday said: “There are officially 72 PEs listed under Schedule 1 of the Act. When we amend our Act early next year we will re-classify entirely and the final answer will come when we complete that process.”
SOEs have been failing to produce annual reports on employment of state funds despite the 2006 State-owned Enterprises Governance Act that compels them to do so, including producing audited finance statements, information on their performance as well as a statement detailing the extent to which they have met their targets.
“State-Owned Enterprises in Namibia have lost the public’s trust. Namibians think SOEs are mismanaged or neglected at best, or vehicles for corruption and self-enrichment at worst. To change this perception, to regain the confidence of the people who ultimately own these businesses, government should commit to a radical transformation with regards to transparency,” the IPPR report says.
It adds that: “Transparency should not only be implemented in the future, but there should be a concerted effort to publish past data for SOEs. This may leave several parastatals embarrassed – but if the Namibian public is to regain trust, they will need to see the reality of the situation, with all faults exposed, to believe that the new commitment to good governance is backed by political will.”
IPPR recommends that Government clarify how many SOEs it owns, what its nature of involvement is, and how these SOEs are classified under the new law. “Following OECD guidelines, this could be done via a public ownership policy and ownership statements to make the new overall governance rules effective, the law should include clear penalties for non-compliance and the new law should clarify who is ultimately responsible for enforcing governance rules, keeping in mind that line ministries have performed poorly in the past. It also calls on Government to consider placing the ultimate oversight with Parliament to enable more transparent governance.
Jooste last month revealed in the National Assembly that HIS Ministry conducted a situational analysis last year and found that there was a lack of compliance to the provisions of the Public Enterprises Governance Act. Primary compliance requirements include performance agreements between line ministers and individual board members that must be signed, governance agreements between the board and the minister, business and financial plans that must be submitted at least 90 days before the end of the financial year and annual reports that must be submitted within six months after the financial year-end of that specific parastatal.
Jooste said the overall compliance status stands at 55%.
He said a dedicated compliance project has been embarked upon by the ministry, but expressed concern over the different financial year-ends of parastatals. “We currently have a situation where the financial year-ends of PEs [public enterprises] fall on different dates. This will be rectified and we will instruct the PEs to amend their financial year-ends to two or three different dates to synchronise reporting and to aid compliance checks,” said Jooste. The minister is concerned over the accuracy and quality of information available from parastatals.