Public Enterprises minister Leon Jooste says the Government is moving ahead with plans to set up a central holding company that will own all its commercial Public Enterprises within the next three years.
The plan, according to Jooste, is based on the Singapore and Malaysia model, where a central holding company becomes owner of all commercial Public Enterprises and reports to the Minister of Finance in line with the provisions of the State Finance Act.
The latest development comes after the Minister announced on Thursday that Cabinet had approved the imminent transformation of the Ministry of Public Enterprises into the Department of Public Enterprises under the Ministry of Finance.
The move was recently recommended by the High-Level Panel on the Namibian Economy and endorsed by Cabinet as one of the approved recommendations.
“This is a decision based on technical facts and strategic rationale where the consolidation and streamlining of operational processes will inevitably result in substantial cost savings since a separate Ministry will no longer have to be maintained. I am entirely convinced that this decision is in the best interest of the nation and the government and that no momentum will be lost in our collective quest to transform the Namibian Public Enterprises,” he said.
“This will also allow for the Ministry of Finance to take control of and be directly involved in the process leading to the establishment of the Holding Company thereby creating critical institutional memory of the actual details of the process. Shareholder functions will be greatly enhanced when the shareholder powers and budgetary functions are consolidated under the Ministry of Finance since they will then have direct oversight into the financial and operational performance of the Public Enterprises and subsidies can then be more accurately aligned to compliance and performance.”
Jooste said because of the continued requirement of Finance ministry interventions when it comes to operations of public enterprises, the move would be in the best interest.
“Experience has shown that most of the issues encountered at Public Enterprises that warrants the intervention of the shareholder, inevitably have a financial implication. These matters consequently require the consistent attention of the Minister of Finance, and many times end up on the agenda of the Cabinet Committee on Treasury (CCT). It is therefore obvious that it is in the interest of the Minister of Finance to always be acutely aware of the status of the Public Enterprises,” he said.
The Ministry of Public Enterprises was established in 2015 and among some of its reforms was the introduction of the Hybrid Governance Model and the Public Enterprises Governance Act, clearly separated the role of the State as policy formulator, regulator and operator by centralizing 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.
The Ministry of Public Enterprises currently oversees the functions and responsibilities of the 98 parastatals.
