Sunday 20 June 2021
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Tighter grip on SOEs needed

Is it too harsh to say that the worst institutions when it comes to adopting sound and well-crafted corporate governance policies in Namibia are the State-Owned Enterprises (SOEs)?
I am sure your answer is no!
But even when the guidelines and laws are clearly stipulated, all is left just to the paper.
Our SOEs are led by well-paid and well-educated individuals, so why do they struggle to deliver the results we yearn for as a country?
One of the areas of focus is the role of Namibia’s State-Owned Enterprises, generally viewed with suspicion by the public and also seen within the country as bloated and in need of a clean-up.
The words typically used to describe the SOE sector in Namibia are “corrupt”, “unproductive”, “bloated”, and “mismanaged”.
A number of SOEs maintain monopolies over key sectors of the economy and smaller SOEs are characterised by low productivity and high debt levels. A lot of the problems and inefficiencies stem from the fact that the interests controlling SOE behaviour are not necessarily aligned with those of the wider economy or society.
Often, business plans and turnaround strategies are not in synergy with the growth path of the country. Of course, Ministers should also take blame for this predicament because, too many at times, they leave the total oversight responsibilities to the boards.
SOE heads have become smart nowadays, what they simply do is to co-opt the board and from there on enjoy a honeymoon phase.
The prevailing poor state of most of the SOEs is due to the reluctance of professionals to sit on SOE boards because of the reputational risks that come with it. Such risks are made worse by the political class who want to throw their weight around.
What you have is merely personalities who look forward to the hefty sitting fees while oblivious, as if they are in the know at all about their mandate.
The people with the know-how don’t have time to drag their names in the mud when numbers don’t add up.
The failure of commercial SOEs to pay dividends to government also speaks volumes about the state of SOEs in this country.
In recent years the media has exposed the fat salaries and high board sitting fees that CEOs and board members rake in, despite the fact that the performance of the companies they head is dismal.
An archive of auditor general reports on abuse of power by SOE bosses, nepotism with chronic underperformance as a norm remains available for public scrutiny.
It is common knowledge that SOEs, like any other institution depend on the capability of its human capital and leadership, however, when top seats have been reserved for personalities wheel-chaired into the positions based on their political affiliations while boards are placed under the stewardship of proxies mandated to meet the wishes of their masters, you get what we have in Namibia today. Most have turned a blind eye to record profits with continued bail-outs having become the order of the day.
The establishment of a Ministry of Public Enterprises in 2015 was aimed to provide better co-ordination in the sector and ensure that the full potential of these SOEs is harnessed.
However, years down the line, Minister Leon Jooste continues to walk around like a robber with a gun that has no bullets. For all the SOEs care, he can aim the gun but nothing will happen.
Government cannot actively participate in the economy, hence the establishment of the SOEs.
In a time where funds are limited in its availability to pay for public good, imagine the joy SOEs could bring to the nation if they were not taking from the same pot that has to pay for our hospitals to be brought to standard. Imagine a Namibia with half of its SOEs paying dividends and taxes. Imagine a Namibia with well performing SOEs and the services they deliver to every corner of Namibia. I guess I am dreaming, but lets keep the dream alive.

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