As part of an intensified drive to reform the country’s perennial poor-performing parastatals, Public Enterprises (PEs) minister Leon Jooste says the Amendment to his ministry’s Act must be expedited to give it the required legal mandate to address challenges plaguing parastatals in the country.
Since its establishment in 2015, the Ministry continues to operate without any legal powers. The cause for the delay remains unclear.
The Hybrid Governance Model is a prerequisite to effect the reforms as it shapes the governance infrastructure upon which reforms can be built, has already been approved by Cabinet in 2016.
The new Hybrid Governance Model groups parastatals into three categories; namely commercial, non-commercial and financial. Namibia has over 90 state-owned businesses.
“We have the skills, capacity and strategy to ensure that the PEs respond to a “new” shareholder which will generate positive results and eliminate unnecessary wastage and possible corruption. “I’m incredibly excited about 2018 and entirely committed to, together with my Deputy Minister and the team at the Ministry of Public Enterprises transform our Public Enterprises. We have the ability to make a significant difference to our economy through our portfolio of Public Enterprises and we need to expedite the process by eliminating any undue stumbling blocks where they inevitably occur,” he said recently in a written response to questions posed to him by this newspaper.
“We need to be bold and commit to some very hard decisions,” said Jooste, adding that there is need to take such decisions and implement the resolutions at a far quicker pace.
“The worst thing is to not take a decision. In fact, by deliberately not taking a decision, one is also taking a decision but this will not take us anywhere. The process will be hard, often controversial and not without casualties but we need to think beyond ourselves and focus on what’s best for the Namibian generations to come. 2018 will be epic for us,” said an optimistic Jooste.
In 2016, government took a decision that empowered Jooste to supervise the commercial state-owned businesses within the country.
This responsibility includes board appointments of key state-owned entities, review of business plans, approval of annual budgets, to determine how much boards and management will be paid and direct special investigations when necessary as well as deal with the restructuring of SOEs.
State-owned entities still report to the minister whose portfolio matches their core business or activities.
Cabinet approved the new system, which Jooste calls a “Hybrid Governance Model”, as opposed to the outgoing one dubbed “dual governance”.
A commercial public entity is described as “wholly or partly-owned or controlled by the state, guided by market principles, to provide a product or render a service in the best interest of the public, and have the potential to generate sustainable profit”.
Commercial state-owned entities which will report to the ministry of public enterprises include Air Namibia, Epangelo Mining, Henties Bay Waterfront, Lüderitz Waterfront, Meat Corporation of Namibia, Namibia Airports Company, Namibia Institute of Pathology and Namibia Ports Authority, Namibia Post and Telecommunication Holdings, Namibia Power Corporation, Namibia Wildlife Resorts, National Fishing Corporation, National Petroleum Corporation of Namibia and the Namibia Industrial Development Agency.
Other commercial parastatals that will be under Jooste supervision once the amendments are concluded include the Roads Authority, Roads Contractor Company, TransNamib Holdings and the Zambezi Waterfront.
Many SOEs have failed to live up to their founding mandates, while some like the national airliner have not submitted its audited annual financial results for over a decade now. Others continue to ignore set remuneration guidelines by paying employees over the top salaries.