The Ministry of Public Enterprises says it will launch a transformation project early next year, which will seek to address the effectiveness and efficiencies of the country’s parastatals.
Public Enterprises Minister, Leon Jooste, said this on Thursday, when he provided an update on the implementation of the hybrid governance model for public enterprises, and also shared some of his ministry’s plans for 2017.
Jooste highlighted that the historic levels of bailouts and subsidies to public enterprises were no longer sustainable or acceptable, and a dedicated effort was needed to curtail this going forward.
He said his ministry had been mandated with a complex task, adding that any type of reform will always be associated with resistance, and even controversy, but that they will always make the most appropriate recommendations, in the best interest of the public.
“The main event lined up for next year will be the launch of the public enterprise transformation project, which will span over a number of years. This project will be the embodiment of our road to transforming Namibian public enterprises into highly effective and efficient entities, providing products and services in the best interest of our nation.
“We have already formulated the draft roadmap for this project, defining certain key initiatives. These will focus on various policies, the enhancement of the effectiveness of boards, the strengthening of shareholder oversight, the implementation of public enterprises monitoring and evaluation systems, improving ministry systems and processes and capacity building of the ministry and public enterprises, to name a few.
“I believe that a number of subtle interventions during 2015 and 2016 have already had an immediate effect, but more radical interventions will be required in 2017, to ensure the necessary adjustments.
“Various business plans will urgently need to be reviewed and enhanced, to address current inefficiencies and boost performance and profitability,” Jooste said.
He added that his ministry will also make the most appropriate recommendations to Cabinet, which would always be based on facts, and never on assumptions.
This will be done collectively with the Ministry of Finance, especially in terms of the restructuring of public enterprises.
“Restructuring may take many forms, which could include merging certain public enterprises, absorbing certain ones into ministries, the listing of certain ones on the Namibia Stock Exchange and attracting strategic partnerships, where appropriate.
“The liquidation of public enterprises is provided for under the existing legislation, but I want to make it absolutely clear that this option will only be entertained after thorough due diligence and when certain conditions are met, which include that the enterprise must have marginal strategic significance, low feasibility and high capital requirements.
“We will never support the liquidation of any of the strategically important public enterprises,” said Jooste.
On the issue of the hybrid governance model, the minister said it had been adopted on 19 July by Cabinet, after thorough consultations with three separate Cabinet committees and various stakeholders.
Jooste said to implement the governance model they needed to amend the Public Enterprises Governance Act, to make provision for the ministry to be empowered to classify public enterprises according to the three new categories, namely Commercial, Non-Commercial and Financial Institutions and Extra-Budgetary Funds.
He said the amendment will also include a schedule whereby all the enabling Acts will be amended to capture the required provisions.
“The important issue I want to communicate is that in the interim period, the status quo remains as before, in that the ministry shares responsibility with the various line ministries, as has been the case under the State-owned Enterprises Governance Council, since 2006 and the Ministry of Public Enterprises since 2015.”
“This means that the line ministries have the shareholder responsibilities, while the public enterprises minister is responsible for governance-related directives and remuneration matters,” said Jooste.