The existing SOEs have collectively gathered a debt of N$43 billion or 25 percent of this nation’s GDP. However, the Ministry of Public Enterprises (MPE) is empowered to ensure that PEs are well managed and reduce the financial burden on the state.
The right man is in the right place at the helm of that Ministry -Honourable Leon Jooste- to manage and mitigate the mess caused by so many others for so very long. But, will they let him to do it?
Reportedly, commercial SOEs, instead of paying dividends to government, they took from government N$1.2 billion in bailouts with the total loss now exceeding N$150 million per year. Surely, the status quo cannot continue. The treasury has no money to underwrite commercial SOEs; the gravy train is empty.
We challenge you to think about the hard work it takes to get a large tree stump out of a field newly cleared for mahangu planting. Digging down deep to remove the spiralling roots, chopping at the heavy stump, burning out deeper roots and then filling in the hole is a labour intensive, sweat-filled task. The roots don’t want to be dug out and the stump is heavy. But, it must be removed so the planting can proceed; Jooste has a field full of SOE stumps to clear.
Notwithstanding the recent passage of the Public Enterprises Governance Act of 2019, from our vantage point, the things that need to happen to get that SOE debt total down and make commercial SOEs perform more effectively is blocked by several massive roots.
The first level of tough roots to be tackled is the process of drafting and finalising the Public Enterprises Policy Framework, Guidelines and Directives along with recruitment and procurement systems regulations. This mouthful of assignments are perhaps the most vital tool needed to get SOEs in Namibia under control and it is not yet done. Given that it took nearly five years for the PE Governance Act to pass, we can only assume more amount of time will be needed to get the implementing tools for the act in place. We believe the political will to get the regulations functioning is minimum within the power halls of government.
The next line of gnarly roots resisting removal are Jooste’s fellow Cabinet ministers who resent being dispossessed of their fiefdoms of commercial SOEs over which they were the ‘line’ ministers.
Territorialism cuts deep. There is an additional power for a minister previously responsible for one or multiple commercial SOEs. (S)He could appoint CEOs/MDs and boards (lucrative posts), approve multi-million dollar contracts, travel to attend events related to their SOE (and receive S&T accordingly), claim any successes made by the SOE, possess inside information about upcoming procurement deals and business plans and supervise (albeit indirectly), staff above and beyond those in his/her own Ministry. That is a large footprint being ploughed away by Jooste.
There have been several reports over the past few years of clashes between Jooste and ‘line’ ministers whose authority he challenged. His lack of empowering legislation was tossed in his face routinely and his comments about suspensions/appointments or contract approvals were disputed in the media and, reportedly, in cabinet meetings.
The third line of deep roots Jooste must dig out will be opposition from boards of directors, particularly those empanelled by the previous ‘line’ ministers. They will resent his ‘interference’ in their affairs (even though he has consultative authority). We recall SOE boards writing letters telling Minister Jooste, in effect, to mind his own business, when he disapproved of or questioned their actions.
Many SOEs have, unashamedly, not submitted business plans, bank statements, audited financial reports and management accounts needed by the PE Ministry to effectively manage their affairs. Some commercial SOEs continue to act as if the PE Ministry is a myth and his requests as background noise. Do those in power in SOEs who ignore Jooste, feel ‘connected’ enough to know something the rest of us do not?
The last line of defence the roots will take is an offense. They will strike at the PE Ministry as they can. We suspect that the long delay in passing the Governance Act was a part of this subtle strike back plan to frustrate Jooste and his team and cause their efforts to lose momentum.
The roots and stump are resisting change with innuendo.
Recall the news leaks and front page stories about the ‘cost’ of the advisors in the PE Ministry. Pointing out the million-dollar advisors at the MPE is a way to strike at the credibility of a cost-cutting Minister who employs highly paid hired-help.
We expect the race card to drop very soon as another way to strike at Jooste as he attacks special interests, secret shareholders bidding on procurement contracts and other sacred cow activities that have made lots of money on SOE mismanagement and lack of business-based oversight.
In this election year, we believe that Jooste’s reach will be even further limited. Leaders and businessmen from ruling party strongholds will be sacrosanct as are any new constituencies the current administration believes it needs for re-election.
While the PE Minister is the man with a plan on this SOE issue, no man is an island. Attempts to scale back wasteful or non-productive (but lucrative) SOE tenders, hold those who won contracts accountable by demanding refunds or implementing court action, costing the closure of a few commercial SOEs, terminating (or confirming) some MDs and CEOs, replacing boards, challenging managers of SOEs to earn their high salaries, or decreasing SOE salary ceilings, will mean stepping on many powerful toes. Will Jooste be allowed to do his job?
As the Prime Minister’s office is invisible on the entire SOE issue, is Geingob, Jooste’s appointing authority, ready to defend his minister possibly against other ministers, special interests and powerful connected people? We suggest that as the head of the PE Ministry labours to remove the stumps from the field, Jooste must watch his political back very carefully.