23 January 2018

Namibia: Venaani Wades Into SOE Privatisation Debate

Windhoek — The leader of the official opposition in parliament, McHenry Venaani, has spoken of his intention to table a motion on the privatisation of non-performing state-owned enterprises (SOEs), singling out the national airline Air Namibia, and rail and road transport operator TransNamib.

Venaani stated that these public enterprises have become the biggest thugs in the country where corporate governance is eroded through corruption and mismanagement of public resources.

"We are going to address privatisation [in parliament], that we must privatise non-performing SOEs in our country. There is no point in hanging on to these institutions that are bleeding state coffers, and the state is continuously bailing them out with turnaround strategies that are turning these institutions into messy thuggery institutions," said Venaani, who is the president of the Popular Democratic Movement (PDM). Although debates have raged for years regarding the privatisation of SOEs, particularly Air Namibia and TransNamib, the parliamentary debates have always been in response to the Treasury allocation of funds to these institutions, and not as motions to the floor.

Venaani referred specifically to Air Namibia and TransNamib as among SOEs that need to be privatised. Air Namibia, he said, needs to undergo a strategic alliance if it is to survive, while TransNamib needs to rethink its existence. The PDM would table the motion upon the resumption of parliament this year.

The privatisation of SOEs deemed non-performing has since last year become heated, and has divided the government, with not all Cabinet ministers in full agreement on what to do with Air Namibia and TransNamib.

Nevertheless, Venaani's motion is likely to come at a time when parliament is discussing the winding up of the Roads Contractor Company, another SOE that has been besieged by non-performance and financial quandary.

In September last year Cabinet approved the winding up of the RCC in the form it is known today and possibly to result in a new, similar but efficient entity. A plan was set in motion to place the loss-making entity under a court-supervised rescue arrangement.

That Cabinet resolution was set for tabling as a motion before parliament. If parliament endorses the decision, public enterprise minister Leon Jooste was tasked to approach the High Court for an application to have RCC placed under judicial management.

The national airline, following last year's public revelations of plans to privatise or implement a public partnership agreement for SOEs, held a full-day session where it articulated its reasons to exist as a national airline. The airline roped in researchers from Oxford Economics, who calculated that Namibia stands to lose an estimated N$1.7 billion in annual contributions to the country's GDP by 2020/21.

The privatisation of SOEs was also hampered by the absence of the Public Private Partnership Act, which was gazetted recently. The Public Private Partnership Act is supposed to guide the transformation of SOEs from state enterprises into public partnership entities, jointly owned by the state and the public sector.

"Air Namibia is one parastatal that needs to go through strategic alliance as soon as possible. It is a competitive industry and we have proven that we cannot run it. We need to get international players for it to become a sustainable entity. If you sell a 50 percent stake of Air Namibia, you will have resources that can be spent in [other] areas to stimulate the economy," Venaani said yesterday.

"We should look at TransNamib, can we run rail successfully in Namibia? Can't we look at strategic partnerships for us to have bigger impetus now that Namibia has become a hub through our harbour? Do we have the technical know-how to benefit from rail?" he asked.

Venaani also questioned what have been the tasks of the public enterprises ministry, since its establishment in 2015, saying he has been waiting on President Hage Geingob to reform SOEs through the new ministry.

"SME Bank [which is under liquidation] has gone on its knees and Roads Contractor Company is about to go under liquidation. I don't know what the Ministry of [Public] Enterprises has been doing in reforming these institutions," Venaani said.

Venaani said the PDM is also looking at debating the pay structures of senior management at SOEs. The notion that public enterprise executives must be given perks comparable to those in the private sector, while the expectations of performance are not the same, is wrong, says Venaani.

"We can't peg a chief executive officer's salary and senior management to the private sector. We can only peg them to the private sector if those institutions are making the same money."


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