Namibia: Jooste Gets Tough On Parastatals, Introduces New Governance Act

The Minister of Public Enterprises, Leon Jooste this week introduced the Public Enterprises Governance Act of 2019, which will monitor the efficient governance, performance and restructuring of parastatals.

According to the new act, board members of non-commercial public enterprises and extra-budgetary funds will be appointed by the line ministers, while board members of commercial public enterprises are appointed by the minister of public enterprises in consultation with cabinet.

The act also outlines that a person will only be allowed to serve on two boards of public enterprises and subsequently allows for the removal of board members in cases of non-performance.

The act stipulates that the minister will enter into performance agreements with each individual board member and the key performance indicators will be directly aligned to those of integrated strategic business plans.

"The Act allows for the removal of board members in cases of non-performance. Failure of the CEO and senior management to comply with the provisions of performance agreements will constitute grounds for his or her dismissal unless such failure was caused by unforeseen circumstances beyond their control," Jooste said.

In giving special powers to the minister of public enterprises, the act further provides the minister with the power to direct special investigations in relation to any matter concerning the business, trade, dealings, affairs, assets or liabilities of a public enterprise.

Regarding subsidiaries created by public enterprises, the act allows the Minister to impose obligations of any public enterprise in relation to any matter with a view to achieve the efficient governance of the subsidiary and the monitoring of its performance and the performance of the Board and senior management of the subsidiary.

"We plan to pay special attention to subsidiaries and will request full disclosure of relevant subsidiary information from all public enterprises," Jooste added.

Jooste further said that as minister of public enterprises, he can only identify a public enterprise to be considered for restructuring in consultation with Cabinet.

"I want this to be noted to allay any fears that the Minister will have the power to unilaterally embark on a restructuring without it requiring Cabinet approval. When any restructuring is contemplated, we are bound by the Act to take into account the purpose for which the public enterprise was created, a risk assessment and impact report, the performance of the public enterprise, the reasons for restructuring and any representations made by any relevant stakeholder," he explained.

Jooste stressed that the successful reform of parastatals is a non-negotiable element that has become critical to ensure that the current economic downturn is countered as soon as possible.

"I believe that economic recovery will be all but impossible without calculated but expedited public enterprise reforms to increase profitability, contain and minimize subsidies and to entirely cease bailouts as soon as practical." Jooste said.

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