The Deputy Minister of Finance and Public Enterprises, Maureen Hinda-Mbuende, has recommended an amendment to the Public Enterprises Act in an effort to increase the employment contracts of Chief Executive Officers or Managing Directors of public enterprises to a fixed 10-year tenure, to promote job security.
In its current state, the Act only allows a CEO to serve for five years, and the contract may be extended for another term by the board, bringing the total allowable tenure to 10 years.
Those who serve in the same position beyond a decade will only be allowed with exemption from the line minister.
“Job security has been a concern in our State-Owned Enterprises (SOEs). That is why you find individuals are trying to eat as much as possible within that shortest period because they are not sure whether their contracts will be renewed upon lapsing. Therefore, I am proposing that their tenure be fixed to 10 years, but on stringent regular performance checks,” she proposed.
“What does one become after falling from a coveted position? It is always quite difficult for them to secure another job, as it is only a few of such portfolios. In fact, some of them are young. Under these economic circumstances we find ourselves, job security is very important,” added Hinda-Mbuende.
There have been cases where the contracts of some heads of state-owned enterprises were not renewed after serving their initial five-year terms.
Under the now defunct Ministry of Public Enterprises, Namibia’s state-owned enterprises witnessed a number of reforms, among those being the introduction of the Hybrid Governance Model and the Public Enterprises Governance Act.
The reforms clearly separated the role of the State as policy formulator, regulator and operator by centralising the ownership of the Commercial Public Enterprises under the Ministry of Public Enterprises while Non-Commercial Public Enterprises resorted under the various Line Ministries and Extra-Budgetary Funds under the Ministry of Finance.
Namibia according to government data, has more than 200 public entities of which 71 are listed. Of the 71 listed entities, 38 can potentially be classified as non-commercial, 22 as commercial, and 11 as financial institutions.
