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Friday 19 April 2019
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A reflection on the Hybrid Governance Model for SOEs

His Excellency the President of the Republic of Namibia has established the Ministry of Public Enterprises  in terms of his powers, functions and duties, specifically Article 32 (3) (g) of the Namibian Constitution.
The mandate of the Ministry of Public Enterprises, as stated in various policy documents and pronouncements, is to reform the Namibian public enterprises with the policy objective to make them efficient and effective. The Ministry has subsequently developed a hybrid governance model as the preferred ideal to govern public enterprises in Namibia. Further, the entities have been categorised in non-commercial, commercial and financial public enterprises.
The purpose of this article is to contribute to the discourse on public enterprises reform in Namibia with particular focus on critical conditions that should exist for the hybrid governance model to work and achieve its intended policy objectives. The model seems to have been a product of comparative studies emanating from amongst others, the Organisation for Economic Cooperation and Development (OECD) and the World Bank. It is important to emphasise that political, cultural and social contexts matter in public policy development and policy choices that governments opt for. What prevails in one context cannot be unintelligently borrowed and applied in a different context without due consideration to political, cultural, social and economic conditions.  One of the critical conditions, as some contributors to this newspaper have already argued is the need for ideological policy clarity. One of the fundamental questions that government has not sufficiently interrogated is the rationale for public enterprises existence in Namibia. Government has not systematically and holistically asked all the why questions of creating these entities and at what cost? The main reason for establishing most public enterprises in Namibia seems to have been the efficiency and effectiveness rationale. It was intended to contain the public service wage bill by downsizing the civil service.
The underlying policy assumption has been that public enterprises and by implication the private sector, are more efficient and effective than the public service. I am of the view that this is a perception, and is not always evidence-based. The unintended political consequence of this admission is that ministers are responsible for overseeing ineffectiveness. Why do we have them then, if this is the case? With the establishment of public enterprises, staff members who might not have possessed the necessary skills, experiences, values and attitudes were transferred to the created entities.
Understanding the imperative of downsizing is therefore important in reforming public enterprises. Why are policymakers agitated with the general performance of public enterprises when the underlying policy intention was to downsize and transfer staff and not necessarily to achieve efficiency gains?  Appointments to the created entities were not necessarily based on appointing the best in terms of knowledge, skills, values and attitudes. Against this background, I posit that government should go back to the drawing board regarding public enterprise reform. The purpose is to holistically diagnose the fundamental problems and not to artificially address symptoms.  I argue further, that the hybrid governance model will not work as intended. This is the case, because government has not broadly identified all the problems and have also not looked at all options in an evidence-based manner. The starting point is to systematically redefine the purpose and continued relevance of each public enterprise in terms of serving the common good, required human capital and sustained funding required in achieving the objects.
The other area of great concern is the selection and appointment procedures and processes of board members and senior managers. Issues of competencies, qualifications, experiences and ethical and moral standing continue to be of  limited consideration even after the adoption of the model. The practices continue to be that the line minister and the executive are predominantly responsible for selection and appointments. Accountability, checks and balances are from the beginning to the end flawed. The oversight role of parliament in the appointment of boards and senior managers is almost non- existent, and thus compromises the processes. The Ministry attempts to address the knowledge and experience dilemma by creating a database of qualified and interested persons.
This might also not produce the intended results despite the good intentions, if the current practices of undue political interference, patronage and general lack of moral and ethical leadership are not addressed. Professionals with integrity will not be willing to serve, if their roles are to dance to the political whims of the appointing line minister. Board members in Namibia in most instances are appointed on the basis of blind loyalty to the appointing minister and not due to added value to the strategic direction of the organisation. Our public institutions are consequently becoming dysfunctional not because of lack of skills and experiences in the country, but due to lack of foresight, corruption, patronage and parochial interests. The fiduciary responsibilities of board members both in their individual and collective capacities must not be a matter that policymakers pay lip service to.
It becomes embarrassing when a board member or senior manager cannot operate at the expected competency level, especially when interacting with other partners where knowledge, experiences and skills are valued as strategic resources. It is equally embarrassing for competent professionals with integrity to report to an incompetent board or senior manager who is clueless about his or her mandate, powers and functions. The world has become globally competitive and knowledge is a resource. Unless ability to do the work and thus merit, becomes a norm and criterion for appointment, the hybrid governance model will not achieve its policy objectives.
*Dr. Marius Kudumo is the Director of International Relations at the Namibia University of Science and Technology. His areas of expertise are Public Policy, Governance and International Relations.




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