Geingob throws down the gauntlet on selling state assets

THE private sector must first prove that it can take over financially crippled parastatals and turn it into money-making businesses before Government will be convinced to privatise successful state-owned enterprises (SOEs).

‘Private companies will always choose the most profitable venture and thus pick the juiciest cherry leaving the local public authorities to carry the burden of the poor while they laugh all the way to the bank,’ Trade and Industry Minister Hage Geingob said yesterday at the 11th Bank of Namibia Annual Symposium, this year tackling the thorny issue of privatisation.Referring to Namibia’s many competitive drawbacks once again highlighted in the World Economic Forum’s (WEF) Global Competitive Index this year, Geingob questioned the capacity of the local private sector to take control of the country’s 52 SOEs.The shortcomings pointed out by the index make the private sector less productive, he said.’Does our private sector have the capacity to take over government enterprises and run them effectively without losing sight of social responsibility?’ the Minister asked in his keynote address.’If Namibia’s private sector is efficient, I’d like to see them take over some of the non-performing SOEs. ‘But they want companies like NamPower,’ Geingob said, adding that NamPower is already working financially.’Why would Government therefore want to privatise it?’ he asked.’Why don’t they take over non-performing enterprises, turn it around and make it work?’ Minister Geingob wanted to know from the audience, packed with members of the business community.’I do not hear an unequivocal ‘yes!’,’ he said.Government needs to hear that ‘yes’ before it would ‘surrender its responsibility to its citizens to private-for-profit enterprise,’ Geingob said.Careful not to ‘fall into the trap’ and fully label privatisation as ‘selling the family silver’, Minister Geingob summarised his view on the controversial issue as: ‘It is the responsibility of Government to promote the optimisation of benefits accruing to the Namibians through building complementaries between the private sector and the public sector.’One of the Minister’s biggest worries about privatisation is Namibia’s massive social deficit, and with it the concern that privatisation might result in higher unemployment and the poor having less access to resources and opportunities.’Privatisation must have a purpose other than just an asset transfer,’ Geingob said, adding that one mustn’t lose sight of the reason why Government got involved in the first place.Shrinking the role of Government in the economy is not necessarily the best approach, but rather right-sizing the involvement of the State, he argued.Deciding on which sectors to privatise is crucial, since an unwise choice can easily threaten the social commitment of these enterprises to Namibians, Geingob indicated.Using the example of NamWater, the Minister said privatisation could easily lead to water no longer being supplied on the basis of need, but the ability to pay.’Privatising water would mean less democratic control over it,’ he said.The Minister said privatisation would remove water from public control, ‘thus robbing citizens of their democratic say over how this important resource is used’.Besides, privatising water also clashes with the African culture, Geingob said.’The idea of ‘water for sale’ is unheard of in Africa, at least before Western civilisation interfered,’ he said.Privatisation has had its ‘alleged’ successes worldwide, but there have also been sectors where private enterprise found it difficult to take on the challenge, the Minister said.jo-mare@namibian.com.naGeingob throws down the gauntlet on selling state assets• JO-MARÉ DUDDYTHE private sector must first prove that it can take over financially crippled parastatals and turn it into money-making businesses before Government will be convinced to privatise successful state-owned enterprises (SOEs).’Private companies will always choose the most profitable venture and thus pick the juiciest cherry leaving the local public authorities to carry the burden of the poor while they laugh all the way to the bank,’ Trade and Industry Minister Hage Geingob said yesterday at the 11th Bank of Namibia Annual Symposium, this year tackling the thorny issue of privatisation.Referring to Namibia’s many competitive drawbacks once again highlighted in the World Economic Forum’s (WEF) Global Competitive Index this year, Geingob questioned the capacity of the local private sector to take control of the country’s 52 SOEs.The shortcomings pointed out by the index make the private sector less productive, he said.’Does our private sector have the capacity to take over government enterprises and run them effectively without losing sight of social responsibility?’ the Minister asked in his keynote address.’If Namibia’s private sector is efficient, I’d like to see them take over some of the non-performing SOEs. ‘But they want companies like NamPower,’ Geingob said, adding that NamPower is already working financially.’Why would Government therefore want to privatise it?’ he asked.’Why don’t they take over non-performing enterprises, turn it around and make it work?’ Minister Geingob wanted to know from the audience, packed with members of the business community.’I do not hear an unequivocal ‘yes!’,’ he said.Government needs to hear that ‘yes’ before it would ‘surrender its responsibility to its citizens to private-for-profit enterprise,’ Geingob said.Careful not to ‘fall into the trap’ and fully label privatisation as ‘selling the family silver’, Minister Geingob summarised his view on the controversial issue as: ‘It is the responsibility of Government to promote the optimisation of benefits accruing to the Namibians through building complementaries between the private sector and the public sector.’One of the Minister’s biggest worries about privatisation is Namibia’s massive social deficit, and with it the concern that privatisation might result in higher unemployment and the poor having less access to resources and opportunities.’Privatisation must have a purpose other than just an asset transfer,’ Geingob said, adding that one mustn’t lose sight of the reason why Government got involved in the first place.Shrinking the role of Government in the economy is not necessarily the best approach, but rather right-sizing the involvement of the State, he argued.Deciding on which sectors to privatise is crucial, since an unwise choice can easily threaten the social commitment of these enterprises to Namibians, Geingob indicated.Using the example of NamWater, the Minister said privatisation could easily lead to water no longer being supplied on the basis of need, but the ability to pay.’Privatising water would mean less democratic control over it,’ he said.The Minister said privatisation would remove water from public control, ‘thus robbing citizens of their democratic say over how this important resource is used’.Besides, privatising water also clashes with the African culture, Geingob said.’The idea of ‘water for sale’ is unheard of in Africa, at least before Western civilisation interfered,’ he said.Privatisation has had its ‘alleged’ successes worldwide, but there have also been sectors where private enterprise found it difficult to take on the challenge, the Minister said.jo-mare@namibian.com.na