Corporate conduct: Namibia’s challenge and crisis

THE challenge facing the Namibian economy is that of diversification and inclusion. Our economy needs to be diversified from primary production to value-added production, resource dependent to knowledge based; from foreign branch plant economy to indigenous-owned productive assets; from a middlemen/women economy to a wealth-creation economy.

In this regard, Government wants to play a role of catalyst. In this role, Government would like to play a facilitative role.In this regard the Government has established the Development Bank and Agricultural Bank.Government has also put in place a regulatory framework through institutions such as the Bank of Namibia and Namfisa.The broad goal is to assist Namibian nationals to acquire productive assets for the purpose of wealth creation.For example, the marine resources management policy has aggressively promoted the Namibianisation of the fishing sector.The Affirmative Action Loan Scheme has promoted the acquisition of productive land by indigenous Namibians.Government has gone further by commercialising its State assets and turning them into parastatals or State Owned Enterprises.These efforts, however, have had limited success.The question is: Why? There is a crisis of confidence in corporate governance.This crisis entails a wide range of issues …Among others these are: * honesty * trust * diligence * competence * service Some of our entrepreneurs have been less than honest.How else can you explain the behaviour of entrepreneurs who take a Government-guaranteed loan ostensibly for developing a particular business venture but divert the loan to pay for something else? Consider the Nando’s affair and similar schemes.Did they really fail because of business environment? I see Nando’s now in the hands of different management.The crisis of trust is very much part of our business environment.The ongoing case of Avid is a case in point.It appears that some of our supposed entrepreneurs are in fact entrepreneurs of a different kind! Some appear bent on raiding national funds.The newspapers …reported about the missing funds of the Offshore Development Company and that some one is going around from one country to another to trace such funds.All these reports point to the crisis of trust in our corporate world.Due diligence is part of corporate governance.How could the Social Security Commission, for example, invest millions in an entity which does not have assets? These are troubling questions …Where was Namfisa when such entities surface, and the regulator is not able to detect them and nip them in the bud? Who is regulating the regulator? Corporate incompetence also seems to be rampant in our country.How can one explain the wave of liquidations of established companies? The management of some of our State Owned Enterprises leave a lot to be desired.Some years ago, a junior financial manager in of our State Owned Enterprises allegedly raped the company of its liquid assets almost on a daily basis.Where was the senior management? Service delivery is one area of our corporate governance which needs strengthening.We have monopolistic hegemonies or corporate collusion in our business world.For example, look at the behaviour of our banking sector in terms of their services and fees charged.How do you explain the behaviour of some of our State Owned Enterprises in the way they price their services.I am told Air Namibia charges almost the same when they fly to Katima Mulilo or to London Gatwick!In this role, Government would like to play a facilitative role.In this regard the Government has established the Development Bank and Agricultural Bank.Government has also put in place a regulatory framework through institutions such as the Bank of Namibia and Namfisa.The broad goal is to assist Namibian nationals to acquire productive assets for the purpose of wealth creation.For example, the marine resources management policy has aggressively promoted the Namibianisation of the fishing sector.The Affirmative Action Loan Scheme has promoted the acquisition of productive land by indigenous Namibians.Government has gone further by commercialising its State assets and turning them into parastatals or State Owned Enterprises.These efforts, however, have had limited success.The question is: Why? There is a crisis of confidence in corporate governance.This crisis entails a wide range of issues …Among others these are: * honesty * trust * diligence * competence * service Some of our entrepreneurs have been less than honest.How else can you explain the behaviour of entrepreneurs who take a Government-guaranteed loan ostensibly for developing a particular business venture but divert the loan to pay for something else? Consider the Nando’s affair and similar schemes.Did they really fail because of business environment? I see Nando’s now in the hands of different management.The crisis of trust is very much part of our business environment.The ongoing case of Avid is a case in point.It appears that some of our supposed entrepreneurs are in fact entrepreneurs of a different kind! Some appear bent on raiding national funds.The newspapers …reported about the missing funds of the Offshore Development Company and that some one is going around from one country to another to trace such funds.All these reports point to the crisis of trust in our corporate world.Due diligence is part of corporate governance.How could the Social Security Commission, for example, invest millions in an entity which does not have assets? These are troubling questions …Where was Namfisa when such entities surface, and the regulator is not able to detect them and nip them in the bud? Who is regulating the regulator? Corporate incompetence also seems to be rampant in our country.How can one explain the wave of liquidations of established companies? The management of some of our State Owned Enterprises leave a lot to be desired.Some years ago, a junior financial manager in of our State Owned Enterprises allegedly raped the company of its liquid assets almost on a daily basis.Where was the senior management? Service delivery is one area of our corporate governance which needs strengthening.We have monopolistic hegemonies or corporate collusion in our business world.For example, look at the behaviour of our banking sector in terms of their services and fees charged.How do you explain the behaviour of some of our State Owned Enterprises in the way they price their services.I am told Air Namibia charges almost the same when they fly to Katima Mulilo or to London Gatwick!