The Ministry of Finance and Public Enterprises Deputy Minister Maureen Hinda-Mbuende says the much-touted establishment of the Public Enterprises Holding, an entity sought to administer all state-owned enterprises (SOEs), will not solve the dilemma of corruption and mismanagement perpetuated at some institutions.
She said the planned entity will not be able to turn around the fortunes of already struggling entities currently governed by boards of directors.
“I have a strong feeling a Public Enterprise Holding will fail, because if current SOEs in their current form, some with a board, are not performing, what will happen now when you entrust many companies to report to a body of maybe five people. It makes no difference, but will just be another way benefiting individuals, as is the case with many companies inundated with corruption,” the Deputy Minister said.
Hinda-Mbuende proposes that governance structures in public enterprises should rather be strengthened to avoid low performance and incidences of corruption.
“Once it becomes a Holding, this is more like leaving the public entity into the hands of the private sector who will only be driven at amassing profits without consideration of the populace.”
The Deputy Minister’s remarks come after a consultation tender for the mooted Public Enterprises Holding closed on 8 September.
The establishment of the Public Enterprises Holding was the brainchild of Leon Jooste, the former Minister of Public Enterprises Ministry which has since now been absorbed as a department in the Ministry of Finance.
In 2021, the idea was recommended by the High-Level Panel on the Namibian Economy and endorsed by the Cabinet as one of the approved recommendations.
The plan, according to Jooste, is 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.
“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,” Jooste said at the time.
“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,”
“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 added.
Already Finance and Public Enterprises Minister Iipumbu Shiimi has revealed that the government is considering 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.
Namibia has close to 100 SOEs.
