Let them ‘eat’

01 February 2013
Author  

THE enactment of the legislation creating the State Owned Enterprise Governance Council (SOEGC) in 2006 gave us all reason for hope about the future of the country’s parastatals. When SOEGC became operational in 2008, we hoped it would spell the end of mismanagement, inefficiency, waste and corruption at the parastatals.

 

Boy were we naive! The SOEGC has turned out to be almost as useless as many of the parastatals it purportedly regulates. Here is a toothless dog if one ever saw one.

In fact, instead of having improved the situation the parastatals seem to be on an ever-accelerating downward spiral in a race to the bottom.

The appointment of unqualified and incompetent CEOs and director to the boards of state-owned enterprises continues unabated.

The boards suspend and then fire CEOs with embarrassing regularity.

In 2011, we saw the suspension of Namcor CEO Sam Beukes, whom the company later dismissed, and then Road Fund Administration CEO Penda Kiiyala who later resigned.

The same year, TransNamib suspended and then fired CEO Titus Haimbili.

Last year we witnessed the suspension of Namibia Airports Company CEO Ben Biwa and Social Security Commission CEO Kenandei Tjivikua.

None of this is new, and this messy circus of peremptory hiring and firing has become a distinguishing feature of the parastatal landscape.

Before the latest crop came Justin Runji at the Roads Authority, Kelly Nghixulifwa at the Roads Contractor Company, Tjeripo Hijarunguru at Agribank, Mike Kavekotora at the National Housing Enterprise and many others too numerous to mention.

Some CEOs, that have made themselves guilty of gross mismanagement and misconduct, cunningly decided to jump before they were pushed – including Runji who fled the country.

In this country however, good CEOs are more likely to face the axe than incompetent executives.

For some reason, one of the defining features of Namibia is that we have an aversion to, and complete disdain for professional competence.

To make matters worse, unqualified directors at the parastatals who seem not to have the slightest clue about company law, contract law or labour law often suspend or fire CEOs unprocedurally.

This often results in huge, unnecessary expenses for these companies when they have to pay compensation or golden handshakes to improperly dismissed executives.

Do you think the boards care? Of course not, after all it is not their personal money. It’s taxpayers money, and as far as they are concerned to hell with the taxpayer.

The directors of parastatals are so profligate and financially irresponsible that they even pay out compensation and golden handshakes to people who depart of their own free will.

Penda Kiiyala was smiling all the way to the bank with a N$800,000 cheque in hand while Tobie Aupindi must have giggled with glee at his N$5 million golden handshake – both after resigning of their own volition. Even where directors have rock-solid evidence of corruption or gross irregularities, they almost never pursue disciplinary action or institute civil proceedings when the offending executive resigns.

The reasons for all the turmoil at parastatals are many and varied.

It is difficult to believe that in the short span of 10 years between 1995 and 2005 Namibia created 50 state-owned enterprises.

The country commercialised many departments or agencies of Government ministries.

Director of the SOEGC Inge Murangi gave a presentation about the agency at the headquarters for the Organisation for Economic Co-operation and Development (OECD) in Paris, France, in 2010.

She set out the rationale for creating the 50 SOEs as better governance, improved efficiency; improving GRN fiscal position, enhanced delivery of service and job creation

If only this fairytale were true!

Murangi conceded that in reality it resulted in poor performance, mismanagement and corruption at many SOEs.

The real reason for the rapid increase in SOEs had more to do with self-enrichment schemes.

Instead of running their departments, top public servants burnt the midnight-oil writing proposals for new parastatals, with the job description for the CEO’s position tailor-made to suit their own qualifications

The real motive was to escape the comparatively measly salaries in the public service.

As CEO of their own parastatal, they would virtually be able to write their own million dollar plus salary cheques and pay themselves whatever they wanted.

The public service also offers relatively few opportunities for stealing large amounts of money.

As head of an SOE, you can however loot the company almost at will. You can award tenders to companies in which you are a hidden partner, together with your friends.

The other problem lies in the way the Government goes about appointing CEOs and directors to SOEs.

More often than not these appointments have little to do with qualifications, competence or high standards of personal integrity.

Very few CEOs or directors have high-level qualifications in finance, business administration, accounting or corporate law.

However, possessing the requisite paper qualifications means little without the necessary practical management experience – especially not when you paid someone to write your university assignments or purchased your degree.

This is the only country in the world where we grab people straight from a university graduation ceremony and make them the head of an important public institution.

No sensible person questions the need for affirmative action in this country, but affirmative action should not come at the cost of monumental financial losses and poor service delivery.

The problem of having 52 or more state-owned enterprises is that we simply don’t have a large enough pool of adequately qualified people to fill all the CEO and director’s position.

Often ministers appoint CEOs and directors because they are favourite sons and daughters from their region, district or village.

In one case, at least, a minister allegedly appointed someone to a board because she is a former mistress, and by all accounts she is messing up Big Time.

If this is true, shame on you! Because of some memorable bedroom gymnastics the whole nation now has to suffer.

We also have an important historical legacy to overcome. Swapo as the party of Government has always had one major Achilles heel.

Even while in exile, Swapo would punish people harshly for challenging the leadership, not towing the line, being drunkards and many other things – but never for stealing money.

As a liberation movement at the time, Swapo no doubt had more pressing priorities to deal with but this tradition has persisted even in the independent Namibia.

Founding President Dr Sam Nujoma famously fired two permanent secretaries because of their fondness for liquid refreshment.

However, as far as anyone can remember the only two prominent members Swapo has ever punished for stealing money are the hapless Sackey Namugongo and Gerry Munyama.

Namugongo had been at it for too long and eventually it became too much even for Swapo to stomach.

The prevailing philosophy in the country has become ‘let them eat’, as one former journalism colleague used to say.

The implications being, that if you complain, you are just jealous because you haven’t figured out a way to ‘eat’ money yourself. That’s not how things should be!

Directors feel it is unfair that only the CEO should ‘eat’ and therefore start to meddle in day-to-day management in order to create opportunities for themselves.

Ministers also sometimes appoint some directors just so they can help the minister get a piece of the action.

In his capacity as prime minister, Dr Hage Geingob now chairs the SOEGC. He recently took office with an enviable reputation from his previous tenure as prime minister as a doer – not a talker.

Please prime minister, do something about this mess.

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