Suspension of SOE executives a costly exercise

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Over the past year, a month has not gone by in which one or the other state-owned enterprises or parastatal has not suspended a CEO or other senior executive.

Almost all of these suspensions are done with full pay under the guise that keeping these people in their positions could hinder investigations. The suspensions at TransNamib and Meatco are just two of the more recent examples.

The problem is that the public never hears what happens to these investigations and in the majority of cases these officials end up either returning to their positions, or agreeing multi- million dollar release packages and being given a “golden handshake”.

This is not even taking into account that they were suspended with full pay and benefits whilst someone else may have been brought in to perform their duties, meaning effectively that during the period of suspension two people are paid to do the same job.

This state of affairs at state-owned enterprises has now become common practice and continues to hinder service delivery, while at the same time resulting in the loss of millions of dollars – both that lost during the alleged corrupt activities and that lost during the multi-million dollar release payments.

It is puzzling that SOEs with expensively assembled boards have been permitted to continue with this economically crippling practice, despite the establishment of a ministry, which we were lead to believe would improve the governance and efficiency of SOEs.

All this comes at a time when the Namibian economy cannot afford to carry such heavy losses and the periods of low productivity which accompany suspensions.

Why is it that boards only seem to intervene once matters have reached the stage where suspension and termination are the only options available to them? The mistake we make is appointing the same people to every single board in the country, even where incidences of fraud and corruption took place under their watch whilst they served on other boards.

The role of the boards of directors has either not been cleared up, or SOE boards are simply failing to perform their supervisory functions. And yet, the same individuals keep being rotated from board to board.

The practice of suspensions with full pay is very costly: it is financially crippling to SOEs that already rely on government bail-outs for their survival and leads to poor service delivery, as SOEs are forced to operate on half-capacity during suspension periods.

Boards must either intervene sooner or the Ministry of Public Enterprises must urgently devise a strategy to overcome this governance problem. The Namibian economy can simply not afford to carry the financial burden of an SOE sector governed through golden handshakes!
* Manuel Ngaringombe
DTA Secretary-General

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