SOE changes imminent
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08 March 2019
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Major reforms in the operations of state-owned enterprises are expected soon, with Public Enterprises minister, Leon Jooste having tabled the new Public Enterprises Governance Act in parliament on Thursday.
If passed and signed into law, the proposed regulations will among other things, proposes to give the public enterprises minister powers such as appointing parastatal board members, monitoring performance agreements, and approving special investigations at state-owned entities.
The much-hyped Hybrid Governance Model for Public Enterprises will also be introduced, while reporting structures of major SOEs will be changed.
Jooste said although the National Council had proposed some minor amendments to the Act, they had been addressed and the bill had been tabled.
“The National Council has proposed some minor amendments to the new Public Enterprises Governance Act. These are very minor dealing with semantics. I will probably be able to table it this week. Note that it’s only the amendments, not the whole Bill. These were in fact certified by the Attorney-General yesterday (and will now be tabled in the National Assembly before The President signs it into law. Only then will we be able to implement the provisions contained in the new Act,” he told the Windhoek Observer.
The minister said the Act will bring more accountability to how SOEs are run by management and board.
“The new legislation makes provision for enforcing accountability and Boards and CEOs will be held liable for reckless decisions once implemented,” Jooste said.
He said SOEs which currently do not have substantive CEOs, “have been requested to expedite the recruitment of substantive CEOs and other executives and several of these are poised to conclude shortly.”
On the issue of skills and why SOEs continue to fail in attract experienced professionals from the private sector, Jooste said the renumeration and working conditions were not attractive enough.
“There are two issues affecting our ability to attract and retain qualified employees for the Public Enterprises. First issue is the matter of remuneration where the notion exists that all employees of Public Enterprises earn exorbitant salaries. From a survey that was conducted by E & Y it was shown to factually incorrect. The second one is more complicated and deals with the fact that the Public Enterprises working environment is not as appealing as one would have hoped for. Negative publicity over a prolonged period has created the perception that this environment is fraught with infighting, political interference, poor corporate governance etc. and most professionals will choose not to expose themselves to such an environment,” he said.
Quizzed on why had approved the salary exemption for incoming Namibia Airports Company CEO, Bisey /Uirab from the set N$1,4 million per annum to N$2,4 million, said the company was due for reclassification, allowing the head to earned the approved package.
“When we receive an application for exemption, we conduct a thorough due diligence before taking a final decision. We consider the status of the specific entity, total assets, total revenue, total primary employment, economic sustainability, the ratios between the various salary scales, the results of past recruitments, industry benchmarks and the importance of the entity. In motivating this particular case, I made it clear that after the pending reclassification, the NAC will in any case move to a higher Tier according to the soon to be finalized new guidelines and this salary will then fall within that bracket. The importance of securing the correct profile leader for the NAC is literally in National interest considering the well-publicized challenges of this strategic company and I am grateful that the candidate was willing to agree to a salary cut (from his current salary) to take up this challenge,” he said.
Namibia has 81 SOEs, a majority of which are underperforming, with government pouring billions of dollars annually.
 
 
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