14 December 2012

Namibia: State-Owned Enterprises - the Frankensteins We Have Created


THE monsters we have created have outgrown themselves. And they are now biting the hand that feeds them.

At a meeting with the Parliamentary Standing Committee on Public Accounts last month, the chief executive officers of various parastatals came out like a fighting pack of hyenas attacking a buffalo. The buffalo in this case was, of course, the Namibian government. At that meeting the chiefs are said to have lamented the undue interference by government in the way they run their ‘enclaves’. They saw government meddling as bordering on the autocratic side of governance.

My feeling is that many people have given up on how most of these ‘monsters’ are managed because no matter how much concerned ordinary Namibians shout from the sidelines on the need for democratic governance, the boards and management of these institutions feel that the public has no business in the affairs of SOEs [state-owned enterprises].

Which to me is a pity, lest they forget that the real shareholders of these various entities are the Namibian people and the government is their main ‘board member’. Comments like “This information is not for public consumption and thus not to be discussed in newspapers” are very common.

This year, for example, Johannes Gawaxab, chairman of the oil parastatal Namcor, argued that political interference hinders SOE progress. Thus he is in agreement with the SOE bosses on the issue of interference. My point here is: what should the government do when things are not so rosy at many of these entities? There are many problems at most of these institutions ranking from lack of good corporate governance (look at the problems besetting the Namibia Airports Company for example) but more importantly the criminal waste of money through wrong investment decisions.

Former Prime Minister Nahas Angula, during the ‘restructuring’ of SOEs, said that there was a perception out there among the public that those who head SOEs are earning too much. This is not a perception, it’s the reality. The CEO of a financially bankrupt entity like NWR used to earn in excess of one million Namibian dollars per year, for example.

And at AgriBank the fourth-highest employee is said to pocket a cool N$800 000 per year. Just imagine what the three top employees get! But this is not the end of the story. Truth be told, most SOEs have runaway salaries willingly approved by their respective boards, or even without their approval in some instances.

A year or so ago the director general of the cash-strapped Namibian Broadcasting Corporation, Albertus Aochamub, was handsomely rewarded with N$90 000 as a ‘performance bonus’ and mind you this came against the background of an institution that was technically bankrupt and desperately looking for a government bailout. And at another ailing parastatal, TransNamib, Titus Haimbili the former CEO, is said to have awarded himself a bursary to study at a university in the UK without the approval of the board of directors. Well he has since been shown that rotating door at TransNamib.

A recent newspaper report which read: ‘NWR paid millions for work that was never done’ doesn’t sound very encouraging either.

The point is that high salary and benefit packages are bound to jeopardise the broader mission for which parastatals were created in the first place. And that mission is to provide goods and services to the public at reasonable prices and where they do make profits, to plough them back into State coffers to contribute towards the overall development of the country, and not to reward individuals at the expense of the taxpayer.

Therefore, we can’t meaningfully reform the parastatal sector unless we address the thorny issue of stratospheric salary and benefit packages of CEOs and senior managers at our parastatals. These salaries represent a siphoning off of state resources for private advantage and are equivalent to an unfair distribution of state revenue.

And in the midst of all the stealing, mismanagement and secrecy that goes on at many of our parastatals, to which the politicians turn a blind eye; parastatals have become some of the biggest ‘black holes’ eating away a good chunk of public resources even though their missions were meant to be self-sufficient. Basically all the SOEs receive bailouts from government, even those said to be money-spinners like NamPower or Telecom. Thus even the so-called dividends paid to government are mere book entries and peanuts compared to the bailouts.

The problem is that we talk of parastatals as if we are talking about the private sector and we end up operating within the same capitalist logic. The point is that you can’t reform the public sector along the lines of private entities. It has never been done before and can’t be done.

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