Reconfiguring And Deconstructing The State-Owned Enterprises

FOR the past 20 years Government has been creating these monsters called parastatals and yet it’s now unable to regulate them. It is a sector that is totally out of control and the hub of most of the corrupt activities that go on in the country.

Last week, however, Prime Minister, Nahas Angula unveiled what was called a ‘plan’ to regulate SOEs in the country. Now if you haven’t read the newspapers, don’t ask me what that ‘plan’ was because I found none in the newspaper article. Or maybe the newspapers didn’t give us the whole picture and there is probably more to come, or if they did, then something is fundamentally wrong at the Prime Minister’s Office.
We are told that Cabinet agreed on new salary packages for SOEs chief executive officers, senior managers and the board of directors. And on top of their already bloated salary packages, a 30 percent performance incentive will complete the picture. What the ‘new’ salary package is, we don’t know.
Then there will be performance agreements signed between SOEs and Government and these entities must be run according to King III guidelines on corporate governance. And finally the moribund SOE Governance Council will be revived to oversee the work of these parastatals although no one knows for sure how many SOEs there are in the country – 50, 60 or how many?
What came from Angula’s Office, I’m afraid, has a familiar ring to it. Remember that there was once a State-Owned Enterprise Governance Council composed of Hidipo Hamutenya, Immanuel Ngatjizeko, Abraham Iyambo and, again, Nahas Angula.
And both Helmut Angula and Pendukeni Iivula-Ithana were at one stage also involved in the ‘study’ and ‘restructuring’ of parastatals. And in 2006 the National Council held hearings on how to reform SOEs. Nothing came out of all those exercises. This doesn’t mean that we shouldn’t give it another try though. But if I was Nahas Angula, or indeed the Cabinet, I would be asking a completely different set of questions.
The point is that we can’t reform SOEs unless we go back to the drawing board and ask ourselves some fundamental questions about the very rationale for the existence of SOEs and what role they should be playing in the broader public economy and society at large.
Angula says that there is a perception out there among the public that those who head SOEs are earning too much. Prime Minister Angula, this is not a perception, it’s the reality. How can a CEO of the financially bankrupt entity like NWR earn in excess of one million Namibian dollars per year, for example? Or why should a manager at the MVA Fund earn more than the NBC Director-General? And just imagine what the so-called money-spinners are paying their CEOs.
The point is that high salary and benefit packages are bound to jeopardise the broader mission for which parastatals were created in the first place. And that mission is to provide goods and services to the public at reasonable prices and where they do make profits, to plough it back into State coffers to contribute towards the overall development of the country and not to reward individuals.
Therefore we can’t meaningfully reform the parastatal sector unless we address the thorny issue of stratospheric salary and benefit packages of CEOs and senior managers at our parastatals and at some of the municipalities as well. Stratospheric salaries represent a siphoning off of state resources for private advantage and are equivalent to an unfair distribution of excess revenue.
Thus if it could be established that the salary and benefits of senior managers were excessive, and they are, then it is justifiable to cut them. In 2005, the salary package of Telkom SA’s CEO, for example, was cut by 37 per cent – from R11, 14 million to R6, 9 million. He didn’t resign in protest because he knew he was still being paid 100 times more than the average Telkom employee.
So, none of these CEOs at our parastatals would resign if you bring their salary on par with the rest of the civil service. Don’t forget that most of the SOEs we have today were once just directorates in our ministries run by permanent secretaries. So there is nothing special about them.
The problem is that we talk of parastatals as if we are talking about the private sector and we end up operating within the same capitalist (ill) logic. The point is that you can’t reform the public sector along the lines of private entities – it has never been done before and can’t be done.
The greatest irony in Africa is that people aspire to high office but once there, they refuse completely to take responsibilities and to make informed decisions, no matter how unpopular they might be in certain quarters, but which they know are in the long-term interest of the broader society and their countries.
So don’t expect much from this latest gimmick because what PM Angula and the Namibian Cabinet has given us is the same old wine in new skins.