THE minister of public enterprises, Leon Jooste, says there will be no place for political interference if one wants state-owned enterprises to flourish.
He regards this as a priority issue because political interference is at the heart of the failure of SOEs, Jooste charged during an interview with The Namibian last week.
An example of interference would be when a transport minister insists that Air Namibia flies a certain route despite evidence that it is not viable.
This behaviour will not be tolerated under the new government, Jooste warned.
According to him, the biggest millstone SOEs are Air Namibia, TransNamib and the Roads Contractor Company (RCC).
However, he said it is also imperative to determine the strategic value of these enterprises.
Internationally, for example, very few national airlines make a profit, Jooste said. Their value to the economy however goes beyond their net loss.
The ministry plans to have the value of Air Namibia’s contribution to the country’s economy computed soon, he undertook.
“I would like us to understand Air Namibia better – we always just look at the subsidy. We can however show what its contribution to the economy is and then the perception will change.”
At the moment, the Ministry of Public Enterprises is not yet fully functional as a ministry.
According to Jooste they are busy establishing the administrative and institutional structures to get the ministry up and running.
As it is, the Public Service Commission has already given the tentative structures the green light, the minister says with a sense of relief.
“But it is terribly important to have a legal basis.”
For the interim, they are looking at legal adjustments. Among others, it entails appointing an advisory council from candidates outside the boundaries of the ordinary public service, he let the cat out of the bag.
Such a council will initially comprise a group of consultants. “The fact that a ministry is being established does not necessarily mean we know what it will look like in the long term.”
“But”, he says with certainty, “it is not necessary to reinvent the wheel”. There are various models outside Namibia of ministries for public enterprises.
Due to the scope and impact of establishing a ministry, any mistake could have incredibly expensive consequences, Jooste says with caution. He expects that it would take approximately one year for them to get all their ducks in a row.
The way forward is for SOEs to be taken from their current line ministries to fully resort under the new ministry, the minister states.
But, removing regulatory bodies from their line ministries could be a mistake, he warns. This would include the Namibia Financial Institutions Supervisory Authority (Namfisa) and the Communications Regulatory Authority of Namibia (Cran). “I suspect we won’t remove them.”
In broad terms, the ministry’s main responsibility will revolve around corporate governance. “There will be certain values and principles to which they will have to comply.”
It will be a challenge to get uniformity in legislation, he admits. They would need to change legislation to have a say in the composition of boards of SOEs. Currently, these boards are dominated by government officials and that would need to change, he says.
“In the end you sit with a board with little knowledge on how to execute their functions. A poor board will always result in a poor entity. It is extremely important that we reposition them (SOEs).”
Too many of these institutions only chase profit, Jooste says. “Profit is secondary. What is important is that they come up with a formal document in which they indicate what their strategic objective is in line with the legal purpose.”
In the short term, the main challenge is a lack of capacity, specifically managerial and board capacity, Jooste says. “In favour of the country, we would have to look outside our borders and appoint people from outside, obviously with conditions.”
The ministry plans to employ technology extensively. “We want to use real time technology to see what is going on at any institution at any given time.”
Many SOEs land in murky water because they accumulate debt. “They then stop paying tax. They need to comply with the Companies Act. The moment they land in trouble, they stop paying all taxes.”
He believes there is hope for SOEs. “I genuinely believe that we can turn around these organisations one hundred percent.
The problems are definitely not insurmountable.”
