Namibia: Good Corporate Governance Creates Market Confidence

22 November 2019

MINES minister Tom Alweendo says state-owned enterprises' management and their boards are in crisis in terms of good corporate governance, costing them market share as customers lose confidence in their doing.

Alweendo said this while speaking at the official launch of the National Petroleum Corporation (Namcor), Hosea Kutako International Airport Service Station.

He stated that the board of directors is supposed to direct and provide oversight on the operations of public enterprises, however, it appears there is crisis in terms of corporate governance within the boards and managements of various state entities.

"Currently, the most challenging issue with state-owned enterprises is observing good corporate governance," said Alweendo.

This is why the government has changed the method of appointing parastatal board members, he added.

The minister applauded Namcor and the Namibia Airports Company for the partnership which led to the establishment of the service station, and urged public enterprises to strive to provide value for the shareholder, which is the government.

The minister said this had proved to be a challenge to a majority of state-owned entities, which together have a balance-sheet of N$62 billion, but only generate around N$23 billion in revenue.

The fuel station is the first opened by Namcor, although others at Ongwediva and Otavi are nearing completion.

Another fuel station earmarked for Otjomuise is in the pipeline.

The fuel stations are part of the downstream activities, as Namcor tries to diversify the fuel sector value chain through the marketing and distribution of petroleum products.

Namcor managing director Immanuel Mulunga said at the event that entering the retail market is part of their strategy to diversify the company's income streams, as provided for in the act under which the company was established.

He gave the assurance that Namcor is not out to compete with the private sector, despite their mandate allowing them to.

"I do not understand the point of having a national petroleum company that only has 3% to 4% share of your own domestic market. This has been happening for the past 28 years; it does not make sense," he stated.

Mulunga said the retail sector also offers high revenue margins, which will contribute to the sustainability of the parastatal, and they have a strategy and a plan to execute that strategy.

Apart from cleaning up their audit report, and securing contracts to supply fuel products to the biggest mining companies, they are planning to roll out service stations all over the country, he continued.

Namcor board member David Maphosa said diversifying the activities of the parastatal into the retail market came at the right time when most multinational companies in the fuel sector are leaving rural areas.

He thus called on the company to spread their retail services all over the country, especially in rural areas, because they are under-serviced in terms of fuel supplies.

Maphosa also urged the Namcor team to uphold corporate governance, and stick to acceptable standards.

See What Everyone is Watching

More From: Namibian

Don't Miss

AllAfrica publishes around 700 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.