The government says it will consider which state-owned public enterprises it will continue to own and operate in collaboration with private businesses or sell once the Ownership Policy Framework of entities has been finalised.
Finance and Public Enterprises Minister Iipumbu Shiimi revealed the government’s intentions on the future of public enterprises during a mid-term budget discussion held by the Institute for Public Policy and Research (IPPR).
“Why should government own public enterprises and what is the objective and how do we manage it and how do we own public enterprises,” Shiimi said.
The government was now seized with discussing the modalities of the framework, to identify public entities it had a key interest in to continue owning them and to consider devesting from some, Shiimi said.
“Once we have agreed on that policy framework, we will then start asking the question, does this fit in the framework or do we have SOEs framework and then we can start to do further work on the framework,” he said.
The framework is expected to enter the public forum soon, for further input, Shiimi said.
“It has been presented to Cabinet and I believe the civil society organisations will also be consulted,” he said.
Shiimi in previous engagements held on the matter stressed that there was neglect of government’s assets, citing rail operator TransNamib as an example.
“There has been neglect in the past and also limited investments to rail maintenance when we are comparing it with road infrastructure that has been ongoing almost every year,” he said.
Shiimi stated that Namibia operates as a capital-intensive economy.
“We cannot rely on old engines of growth even though the country is commodity driven. We know extractive industries do not create enough employment, even though they produce enough revenue and foreign exchange,” he said.
This comes as government in 2021 announced 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 then Public Enterprises minister, Leon Jooste, was based on the Singapore and Malaysia model, where a central holding company becomes the owner of all commercial Public Enterprises and reports to the Minister of Finance in line with the provisions of the State Finance Act.
The plan was allowing shareholder functions to 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.
The Department of Public Enterprises which now falls under the Ministry of Finance, currently oversees the functions and responsibilities of the 98 parastatals.
