Mubita’s Anecdote: The futility of resuscitating moribund parastatals

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We have come to accept that parastatals are essentially financially semi-autonomous public corporations created by government to perform functions that cannot be efficiently carried out by the government.

Such functions are deemed not suitable or are too unattractive to be undertaken by the private sector. Logically, there are two types of parastatals: those providing essential social services, and those that are commercial in nature, which are required to generate funds and contribute to the national budget out of their business ventures.
At Independence we had 12 parastatals. Currently they are about 89. Given this scenario, one would assume that the delivery of social services would have quadrupled. Instead, we have seen a serious deterioration in the management of these bodies, which are riddled with corruption and incompetence.

Management – understood to be an art of coordinating the elements or factors of production towards the achievement of the purposes of an organisation and the accomplishment of objectives through the use of human capital, materials and machines – is elusive in most, if not all our public corporations. Many have failed to live up to expectations, to the extent that there is an urgent need for them to be abolished and others to be merged.

The abysmal failure of most of our parastatals is linked, rightly or wrongly, to a fundamental breach of acceptable practice of good public sector governance, in that they were created as a response to the seeming failure or poor performance by government ministries in order to suit political or individual interests. They have ultimately become a management misadventure at great cost to government.

The majority of the functions being performed by our parastatals can effectively and efficiently be done by directorates in the line ministries. Instead of strengthening directorates in ministries, we opted to create public entities as employment ventures. Many have no clear mandate or objective, as their functions duplicate the functions of existing ministries.

This duplication of functions only serves to increase the cost of governance, while reducing the resources available to tackle key developmental challenges facing the country. All these parastatals with duplicated functions end up fighting for the same turf and resources from line ministries.

Corporation, for example. Apart from increasing water tariffs, one may spend years to figure out what value this entity has added to the supply of potable water to Namibians.

It makes no sense that in addition to Namwater, we also have the Rural Water Supply, doing essentially the same thing. Surely, the Department of Water Affairs can do just fine, as it did before Independence at affordable costs.
Government could save taxpayers billions if some of these parastatals could be scrapped and return their mandates to government ministries. Similarly, many of them could be merged into sustainable and efficient public entities.
For example, the Road Fund Administration, Roads Authority, Roads Contractor Company, Namibia Motor Vehicle Accident Fund and the National Roads Safety Council could be merged into one parastatal. In fact TransNamib could be added to this.

It is commonsensical that the Meat Board of Namibia and the Meat Corporation of Namibia are two sides of the same coin.

Government would not lose a cent if the Namibia Press Agency and New Era Publication Corporation were to merge. It baffles the mind why some of these entities continue to exist separately.
It goes without saying, therefore, that the harmonisation and rationalisation of government parastatals is critical to enhance service delivery and utilise national resources sustainably. The continued futile resuscitation of these moribund parastatals is not sustainable.

This argument should not be interpreted and understood to mean that one is against these parastatals. The argument is raised because our economy is small and these many institutions are underutilised, while absorbing a large part of our national budget.

We cannot have fully-fledged parastatals doing the same thing. There is good reason to consolidate their functions so that our small economy is not strangled with unnecessary expenditures, especially for functions that government ministries should be performing.
It is time that government thinks of repositioning, rationalisation, and consolidation of parastatals in a manner that will ensure that they are aligned to the national development agenda.

Additionally, there is a need to focus on responsive service delivery supported by strengthened corporate governance, while unlocking the value inherent in sustainable parastatals which would help to increase the wealth generated by these entities, and in the same vein addressing critical social needs supportive for a sustainable wealth creation process.

There is a need to develop standard criteria and procedures for restructuring, merging and/or dissolution of the existing parastatals, with a view to removing overlaps and duplication of functions, and abolish institutions whose mandates are no longer relevant. While doing so, we may wish to also review the roles of the line ministries and develop a strategy for capitalising parastatals to enable them to deliver specified social development goals.

* Dr. Charles Mubita holds a PhD in International Relations from the University of Southern California.

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