By Hafeni Kashimbonde
Historically, the majority of Namibian state owned enterprises have faced heavy criticism for failing to meet performance targets and acting as financial burdens to the state.
Today, Namibia’s state-owned enterprises accumulated a combined total debt of approximately N$11.12 billion and taxpayers remain exposed to a further N$11.8 billion in state-guaranteed debt.
This is equivalent to roughly 4% of Namibia’s GDP, creating heavy fiscal pressure and forcing a constant over-reliance on state bailouts.
The central question is: who bears the financial burden when boards of directors are held answerable to their supervising ministries?
Regulatory and Compliance gap`
Because supervising ministries appoint board members and remove them, political mandates and social agendas frequently override sound business logic.
This happened when former Public Enterprises Minister Leon Jooste fired the entire board of the Namibia Industrial Development Agency (NIDA) after state funds were spent without an approved budget. Recently In August 2026, the Minister of Works and Transport, Veikko Nekundi, dismissed five members of the Namibia Airports Company (NAC) board with immediate effect.
The decision followed an internal audit and investigative report that flagged major governance, procurement, and recruitment irregularities. Key findings in the report included the controversial transfer of 19 company vehicles to managers at heavily reduced rates, as well as multi-million dollar procurement irregularities tied to executive contracts.
The dismissal sparked a legal dispute, with NAC Chief Executive Officer Bisey /Uirab approaching the High Court to challenge the minister’s decision and block the implementation of the report.
While the law permits suing negligent directors for financial recovery, failing boards are simply replaced without personal consequence, leaving taxpayers with the bill.
This failure is compounded by commercial banks, including FNB, Bank Windhoek, Nedbank, and Standard Bank and other banks, that lend based on implicit government guarantees rather than actual financial health, effectively shielding mismanaged state firms from the disciplining threat of nonperformance.
Namibia has watched the exact same script play out across other major state-owned enterprises (SOEs); most notably, Air Namibia.
The national airline collapsed into financial ruin after decades of state bailouts, grounded its fleet, and left the public outraged before being liquidated in 2021 despite repeated board overhauls and failed turnaround strategies.
Solution:
The fundamental question here is not whether SOEs are doing anything right or wrong, it is the systemic failure of the line ministry to enforce statutory and criminal liability, choosing instead to handle financial misconduct as a mere human resources realignment.
This is an embedded cultural issue and a big problem for the state. When state-owned enterprises (SOEs) collapse under the weight of unauthorised expenditures or inflated tenders, dissolving the board and issuing severance packages directly violates the Public Enterprises Governance Act and corporate fiduciary duties. This creates a severe moral hazard where criminal negligence carries zero personal consequence.
The private sector strategically scouts the best talent (CA’s, Compliance Officers, Company Secretaries, Legal Advisors) straight from the undergraduate lecture halls offering exclusive graduate packages and performance contracts.
If the state expects its parastatals to compete, it must decisively untangle these institutions from the controlling grip of political line ministries.
Only by liberating state-owned enterprises from ministerial oversight can the public sector offer the incentive and competitive appeal it needs to attract top talent and perform like its private sector peers.
Other crucial steps include enforcing asset clawbacks under anti-corruption frameworks and offering competitive, performance-linked compensation packages.
High performing talent will only assume these leadership roles when boardrooms are governed by strict meritocracy rather than political patronage, and where operational excellence is shielded from bureaucratic interference.
Conclusion:
True institutional accountability requires a paradigm shift from mere administrative restructuring to rigorous criminal prosecution. Until a profound shift redefines Namibia’s socio-political landscape one where negligent executives and board members trade their bespoke boardroom tailoring for prison denim, Namibia’s public assets will exist simply to swallow state resources.
The message from the state must be clear: if you run a public asset into the ground, you will not just be replaced; you will be held legally and financially liable.
Hafeni Kashimbonde is an independent governance expert and the former company secretary at FirstRand group and Absa Group. He currently lends his expertise to Joburg Ballet as a member of two key boards: the Social, Ethics and Transformation Committee and the Remuneration, Nominations and Governance Committee.
