Namibia: Qualified Namibians Shun SOE Boards

27 September 2021

Minister of public enterprises Leon Jooste has bemoaned the 'culture' of reputable and qualified Namibians opting not to serve on parastatal boards because of political interference and the poor implementation of corporate governance architecture in the sector.

Jooste said the government is not keen to rush for the privatisation of struggling parastatals that are failing to sustain themselves and strike a balance between affordability of services and profitability.

Speaking on The Namibian's current affairs programme 'The Conversation' on Friday, Jooste said the government's quest to have experienced and qualified Namibians selected to serve on the boards of various state-owned enterprises (SOEs) has been negatively affected by the fact that professionals have less confidence in the way parastatals are managed and run.

"What is more important now is to get the best people to serve on these boards. We have started a transparent process of advertising and engaging professionals from the private sector to serve on these boards, however, the supposed political interference and way these organisations are managed make it difficult for professionals to take opportunities there," he said.

An upbeat Jooste said Cabinet has since endorsed a plan of approving only sustainable and reputable business models for parastatals.

He poured cold water on suspicions of a witch-hunt at TransNamib, through the ongoing audit he sanctioned to evaluate the current state of the company, as well as flush out any historical challenges that may create bottlenecks in taking the railway company forward.

"There are efforts being made by management at these parastatals to improve operations, but recently at Cabinet we agreed that we will only approve sustainable business models. Bearing in mind the challenges we are facing because of Covid-19, we have also made it mandatory that these parastatals should finance their own business plans," he said.

Jooste reiterated that the fiscus has now adopted a strong stance of not spending money it does not have to bail parastatals out, due to pressing commitments elsewhere.

"We have sort of said enough is enough when it comes to bailouts as these are not sustainable, so the parastatals themselves need to come up with future plans that work and can be executed within their budgets," he said.

Jooste added that while there are relevant efforts being made to change the working culture within parastatals like TransNamib, the work culture and ethics of some parastatal employees are counterproductive, making it difficult for management to have a quick turnover of results.

"I know TransNamib are making frantic efforts to find a working formula for the momentous task they face in changing mindsets."

Also speaking on 'The Conversation', TransNamib chief executive officer (CEO) Johny Smith said while they are making some progress in turning around the fortunes of the perennial loss-making entity through their new business plan, their coffers are dry.

"It is very unfortunate that we have to go through the process of voluntary retrenchments which has already been sanctioned by Cabinet. There is no one to give us the money to improve our situation because the shareholder is not in a position to do so," Smith said.

Smith was offering context to recent reports on TransNamib's planned retrenchment of about 340 employees.

He said SOEs are attempting to implement a voluntary exit strategy for employees, which falls in line with their strategic business plan.

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