SWAPO Party stalwart and Secretary for Information and Publicity, Helmut Angula, has claimed that the ruling party was not aware of the challenges facing the defunct SME Bank prior to its takeover by the Bank of Namibia at the beginning of March.
Angula said this while speaking at the Windhoek Observer Forum that was held at the International University of Management (IUM) on Wednesday, under the topic, SOEs and Retrenchments: the conundrum.
He said the ruling party only found out about the challenges at the bank when it was too late, thus they could not intervene.
“SWAPO had no idea that is what was going on. We only woke up being told that the Bank of Namibia was proposing to close the bank, and once that happened, politically, there was nothing to be done,” he said.
The former Cabinet minister added that closing the bank was not a good move as this had not only strengthened the monopoly of foreign banks that existed before, but it had also left many people without jobs.
“The SME Bank closed down without due regard for the people – this action affected about 14,000 Namibians. SME Bank was a bank that Small to Medium Enterprises (SMEs) could look forward to with hope. As SWAPO, we do not want to see people in the streets without jobs or business prospects. It took the country years to have something like that and it will probably take us 20 years to have something like that again,” he said.
SME Bank was established when the Namibian Government entered into partnership with Metropolitan Bank of Zimbabwe (MetBank) and controversial Zimbabwean businessman Enoch Kamushinda’s World Eagle Investments. The two had a 30 percent and five percent stake in the bank, respectively while the Namibian Government owned 65 percent.
The bank officially closed its doors in July after it emerged that it could no longer meet its commitments with clients following a dubious N$200 million investment in South Africa.
According to the Bank of Namibia, SME Bank needed N$359 million in recapitalisation to remain afloat, however, the Namibian Government, as the majority shareholder, declined to pump in more money into the ailing institution.
Turning to State-owned enterprises (SOEs), Angula said most entities are currently struggling financially because they initially acted as if they had a lot of money when they gave out hefty salaries to executives who were not performing.
“There is a contradiction as to why we are paying market related salaries for SOEs, while the SOEs are not making a profit and surviving on subsidies from Government,” he said.
He also blamed the country’s legal system for “protecting” corrupt individuals, saying this makes it hard to hold executives to account.
“The country’s legal system makes it difficult to hold people to account. The burden to prove that somebody is guilty lies with the State. This is why many managing directors who get suspended from SOEs end up going for years receiving full salaries only to be given a golden handshake after, because of lack of evidence.”