Where Our Parastatals Are Failing

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By Josephat Sinvula

The creation of over 50 parastatals by the Government of the Republic of Namibia since independence is desirable.

Both the Namibian masses and the “petty bourgeois” nationalist leaders expected a lot from them. The masses hoped that their living conditions would improve as a result of what they saw as a deliberate commercialisation policy of the Government to not only “down-size” and “right-size” the inherited bloated Public Service but also to address the perceived inefficiencies in the provision of goods and services. That is, maximising national welfare through Government intervention and this was, in fact, what their leaders promised them to deliver.

But the promise has not been honoured for many reasons, one of which is the fact that there has not been a fast-tracking of managerial competent Namibians to efficiently manage the newly created commercial entities. Some parastatals have been effective in ensuring that the top echelons receive outrageous remuneration packages but are not efficient in their operations.

Conversely, you don’t need to be a rocket scientist to realise that some parastatals do not serve the interests of the workers and peasants. What is needed is what I call the “balance of social forces” in this country among the workers, peasants and a pool of competent managers managing such parastatals who are capable of providing the masses with the necessary tools to build a better society.

The Problem and its Setting
State ownership of enterprises is not a new phenomenon. Indeed, since the end of the Cold War, there has been a significant large-scale public sector reforms in both Europe and the US, specifically focusing on privatisation as an economic tool to foster economic growth.

With regard to Namibia, which pursues a mixed economy, the share of State-Owned Enterprises in the national output and in employment is smaller than in many other countries where the State has played a larger role or even dominated economic activity over long periods. The report on a Governance Policy Framework for State-Owned Enterprises in Namibia, submitted to Cabinet on 25 October 2001, stated as follows:

“In 1997, it was estimated that SOEs contributed 2.3 percent towards national output and 2 percent towards total employment-relatively low percentages compared to their contribution in African countries such as South Africa (14.9 percent), Zimbabwe (11.3 percent), and Malawi (4.3 percent).

The Namibian situation, however, compares well with the situations in the so-called first world economies, such as the United Kingdom (3.4 percent), stronger South American economies, such as Argentina (1.3 percent) and developing Southeast Asian economies, such as the Philippines (2.2 percent).

However, given their significant role in the national physical and logistical infrastructure, SOEs operations fulfil a strategic function in the national economy in terms of economic growth, development and poverty eradication”.

The creation of so many State-Owned Enterprises in a short span of 17 years is a major public policy goal to which all modern states subscribe. And it would be foolish for any government not to be seen as being in favour of improving the quality of life of all its citizens.

In order to understand why the creation of some SOEs has so far remained an elusive goal in Namibia in terms of derived benefits, we need to examine its true meaning as well as its deeper significance for the State and Civil Society.

Where Our Parastatals are Failing
Whereas Government was unable to effectively control the proliferation of parastatals in the country coupled with how to deal with ruthless incompetent managerial staff, there was irrefutable empirical evidence that the existence of some of these parastatals was only benefiting a privileged few on their boards and management. In other words, government was indirectly creating what we political scientists call a “Comprador Black Elite” who initially had expressed commitment to the ideals of democracy, economic development and Pan-African unity. However, such aspirations were eventually replaced by new commitments, chief among which were a fascination with politics and economics as an exciting and lucrative career – with emphasis on concrete material gains in power and wealth.

Most of us who spent most of our adolescent and adult years in exile will recall vividly how some parastatals in some African countries dismally performed after independence to the extent that the heads of those parastatals employed their kin and kith from their ethnic groups. Sounds familiar because the jury is not yet out on this one! What we need to establish in our parastatals is not to resuscitate “dying” parastatals but to have a national identity that transcends ethnic, regional and other particularistic ties and promote national integration through participation, economic exchange and cultural interaction by all segments of the Namibian population.

Concluding Remarks
The Government of the Republic of Namibia must be commended for being proactive and far-sighted by putting forth the required policy framework that would enable the Government to revisit its policy position on commercialisation and privatisation. The creation of a State-Owned Enterprise Governance Council (SOEGC) chaired by a Cabinet minister and other Cabinet ministers as members will go a long way in cementing an integrated governance policy framework according to which SOEs must answer to. The financial implications are minimal if one takes into account that in South Africa, there is an entire ministry responsible for State-Owned Enterprises. The crux of the matter in Namibia is not so much lack of enabling legislation but simply lack of the will to enforce the law, rules or regulations!

Some of us are not impressed, neither do we dream of catching up with those entrepreneurial advisors hopping from plane to plane extracting vast sums of money for “advising” governments and corporations on how to manage their affairs. What is needed instead is for our restructured parastatals to become androgynous-rallying both technocrat women and men recruited solely on merit and who have the national interest of our country at heart!

Josephat Sinvula is Head of Human Capital at Oshana Regional Council. The views expressed in this article are his own.

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