Shut down non-performing SOEs – MP

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Windhoek

Rally for Democracy and Progress (RDP) MP, Mike Kavekotora, has called on government to take a firm stand against non-performing public enterprises – even if it means privatizing or closing them.

Kavekotora made the remarks on Tuesday in his contribution to the debate on the Public Enterprises Bill tabled last week by the Minister of Public Enterprises, Leon Jooste.

“If an entity is not financially viable, close it or privatize it because we cannot afford to abuse the limited resources that could have been used on other social avenues,” stated the RDP lawmaker.

DTA of Namibia MP Elma Dienda called on the public enterprises ministry to ensure managers at public enterprises are appointed on the basis of capability and not because they have served in the public service for a long time.

“The idea of performance agreements and performance-related promotions has been touted for implantation in the public service for a long time and again whilst the ideas are noble, until we see it being implemented at ministries then we cannot realistically suddenly expect it to be successfully implemented at SOEs,” she said.

She also spoke against management members of companies who “can pay performance bonuses to themselves with the one hand and with the other hand also beg for bailouts from the government.”

Several SOEs have over the years gone on their knees begging government for bailouts amounting to millions. These entities include TransNamib Holdings and the Road Contractor Company (RCC) that are cash-strapped mainly due to poor investment decisions and poor management.

Most of the lawmakers who contributed to the debate since the Bill was tabled last week were primarily concerned about the performance of SOEs, appointment procedures of board members and accountability.

Responding to the wide-ranging concerns, Jooste said government would in future deal with parastatals in a different way compared to the past.

With some MPs also calling for CEOs and board members to sign performance agreements, Jooste said: “There is no use having performance agreements in the absence of performance management.”

He also warned against unnecessary pressure on SOEs to make profits, saying: “The primary function of most SOEs is not really to generate profit. Some are there to fulfill strategic roles that the private sector cannot fulfill. Although some do not generate profits, they play a huge role in helping government to achieve its goals.”

“Too much pressure on SOEs will be to the detriment of consumers,” he said.

As for the proliferating number of turnaround strategies which enterprises undertake, Jooste said most entities rarely find themselves in crisis situations that require turnaround strategies because of funds that have dried up, adding that the problem mostly lies with the boards and management of companies.

“We will come up with corporate governance principles by which all public entities must abide,” he said.

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