The meaning and role of SOEs in Namibia

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The history of the State Owned Enterprises (SOES) in Namibia cannot be separated from the history of struggle against foreign rule on the one hand and for socio-political and economic emancipation on the other. Many public enterprises were tied into the lives of state run financial and economic institutions either in South Africa and therefore did not have a life of their own in Namibia, and some of these South Africa organisations date back to the 20th century. Others were created in South Africa in the 21st century indicating that they have undergone some phases and stages of transformation and restructuring which had an impact on their institutional culture and styles of operation. Against this background, the need to commence and continue the restructuring of SOEs was inevitable. In addition to the monumental political change in the early 1990s in Namibia, government’s focus on the transformation of the state owned entities was also necessitated by other factors, namely: (a) the arrival and the ongoing democratisation of the public space; (b) the unprecedented modernisation and changes in technology; (c) changes in international economic conditions after the collapse of the Cold War; (d) the realities of a Namibia sandwiched between two strong economies—Angola in the north and South Africa in the south; (e) the economic inequalities with race and gender factors that came about as a result of a deliberate white supremacist and male chauvinist planning paradigm; (f) the need to manage expectations following the arrival of democracy and a human rights culture; (g) changes of political and socio-economic development imperatives; (h) the importance of making Namibia a competitive nation based upon its economic growth and prosperity; and (j) the need to tackle rampant poverty through, inter alia, job creation and small and medium scale business interventions towards self-reliance.
The ongoing restructuring initiatives to be carried out by the Ministry of Public Enterprises occurs in the context of a dynamic process of nation-building, part of which is the ongoing realignment of planning with the broader and medium as well as long term stratagems of the Namibian state to steward available resources towards the goals of development, peace, security and stability.

The fundamental question is: What is the most appropriate way or model to re-organise those entities that fall directly or indirectly within the remit of an elected government to guarantee that resources are to be utilised for purposes of national development, combating poverty, deliberate and purposeful distribution of wealth and making life better for all?

There are no easy or permanent answers to this question. There is a need for wider debate and bagging of heads towards the common good for all Namibians in the short, medium and long terms. At the very least these conversations will lead to a broader and common understanding of the nomenclature used when people are engaged in the dialogue. A broader buy-in of concepts is a battle half-won.

The reorganisation or restructuring of SOEs in Namibia has to be understood and appreciated against the fact that Namibia is a direct consequence of European adventurism and the latter day apartheid colonialism, both which were predicated upon a world view of white supremacy and that Namibia’s resources, natural and human, were to serve the interest of white people; the needs, existentialist and development of the indigenous people of the country were secondary to the interest of the countries form which the political administrators came, and the socialisation of state-run companies that existed in Namibia at the time of independence was not in favour of the benefits of the majority of the country’s citizens but to augment the development and economic success of foreign owners.

Also, Namibia became independent at a time when the whole international economic order was undergoing a serious metamorphosis from being the bi-polar to a mono-polar reality wherein the capitalist ethos gained the upper hand over what was once the alternative to capitalism, namely some measure of socialism or communism.
Further, the first democratic government in a free Namibia came to power through a peaceful settlement with no losers and no winners, and thereby inherited the extremely skewed economy and the state possessed very little power to alter things drastically or immediately.

Moreover, the first democratic government under the leadership of SWAPO was devoid of a thorough intellectually sound socio-economic and political philosophy with which to transform the country from colonial life to national life on the ground and therefore had to “muddle through” as SWAPO came to grips with the business of governance and state power.

The new young Namibian state suffered a deficit of intellectual prowess that would have been seized with the important and necessary function of theorizing and scenario planning, and as a consequence continued to fix the vehicle while it was moving;

In the absence of an alternative to capitalism the new political elite in the country fell prey to the temptations of wealth accumulation and the banality of the politics of the belly as the only game in town.

The economic elite was caught up in the ideology-less transitional phase from colonial rule to self-governance as they were co-opted and baptised into the habit of land ownership and monopoly shareholding industry.
Like most political elites, the new rulership of the country became synonymous with access to resources and unfettered political power such that corruption crept into the body public of the country so much so that economic and white financial players realized the need to play a politically correct game by turning black politically connected people into tenderpreneurs and heartless middle-men in grey suits chasing only after wealth and at the expense of the values for which the struggle was waged; turning themselves into a liability and serious impediment to real economic sustainable development in tandem with the noble intentions of the government, namely to narrow the gap between extreme wealth on the one hand and extreme poverty on the other.

Both the wealth as well as the poverty equations in the country have a racial and a gender character. Namibia has adopted a human rights based democracy which has as one of its consequences the state’s inability to intervene significantly to transform the country’s economy without violating its own laws.
Namibia’s workforce is too small and limits the country severely in terms of possibilities for manufacturing industries, an economic reality which would have aided the transformation of the economy from a dependant one to a self-reliant one.

Namibia straddles between the international designation as a middle income country and the self-preferred status of a least developed country in order to qualify for certain loans and grants, whereas the comportment of the economic and political elite is that of a rich country that can afford to do many things poor countries cannot.

This background created the circumstances that led the Government to embark upon a commercialization and outsourcing of government economic functions between 1995 and 2000. This process led to the establishment of state Owned Enterprises and reorganization of state-owned companies and as Air Namibia (formally Namib Air) Nampower (formally SWAWEK), the Namibia Airports Company and the Namibia Wildlife Resorts. In 2001 a study was conducted by Government to understand the sector out of which came the enactment of the State Owned Enterprises Act 2 of 2006, and the establishment of the State Owned Enterprises Governance Council to oversee the governance of SOE’s, restructure them and carry out any incidental functions in the process of regulating the industry. Following this process was the classification of the various SOE’s into three tiers: (a) their one for service rendering entities, (b) their two for semi commercial entities and (c) their three for commercial and profit making or revenue generating ones.

In the period leading up to the 2014 national elections, the Prime Minister and the governing party Presidential candidate alerted the nation to the necessity of new reform of the SOE sector and possibly create a new Ministry of Public Enterprises for purposes of better regulation, oversight and management. In essence the new Ministry which has never been established has a responsibility to reform the sector and create a more centralized mechanism and a reduction of role players to guarantee continuity, transparency and seamlessness. This sector remains uncertain and riddled with more questions than answers. The following are the main challenges facing the SOE sector:
The state remains weak and without ideology through no fault of its own. China, where the SOE’s are more productive economic players, the government is stronger and does not pretend to place emphasis on human rights of workers and citizens;

Lack of clarity regarding the reporting and accountability lines, be it the line ministries that managed different SOE’s before or dot they all fall under the new Ministry of Public Enterprise.
The culture that has crept in the sector what causes the SOE leaders to become “fat cats’ at the expense of the goals of the government;

The growing penchant on the part of directors of governing boards to server of various interlocking boards for purposes of harvesting sitting and retainer fees; Lack of ideology of the state to steer the activities of the SOE sector;
As time passes and boards of directors change, the original purpose of various SOE’s get lost;

Members of Governing Boards becoming too conceited and getting involved in the day to day operational issues of the organizations they are meant to guide and steer, not micro managed.
Political interference by way of prescribing to or approving directors who are either not qualified or give political agenda to fix the leadership of SOE’s

Public Enterprises in a Developmental State like Namibia have vital role to play as they are an extended arm of the state in stewarding the nation towards its appointment with history when there is a ‘common good’ for all. (To be continued)

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