Ntelamo Ntelamo
Recently, in a couple of NBC prime time news inserts, the minister of public enterprises painstakingly explained his ambition to transform public enterprises in Namibia into successful enterprises. After one of the news inserts, Facebook posts were featured soliciting reaction from the public about the Minister’s ambitions. One stood out for me, it read along the following lines “all talk and no action.”
I write here as a concerned citizen who believes that transforming public enterprises is not a scientific assignment. I, therefore, express that, to change public enterprises into very successfully run and managed entities is probable if those in power beginning with Cabinet, specifically, and the President to whom Cabinet reports can uphold fairness and integrity in their conduct and practices around the control, ownership and management of public enterprises in Namibia.
In Article 40, the Constitution of Namibia establishes what is therein called parastatals, popularly known as public enterprises in common parlance. Public enterprises come in many forms, some are established out of the Companies Act, some through a statute of Parliament. All public enterprises’ enabling statutes or documents prescribe some form of a shareholder, usually a Minister or the Head of State. With the passage of the Public Enterprises Governance Act, 1 of 2019 (PEGA), some classifications have been introduced, to split public enterprises into commercial, non-commercial and extra-budgetary funds.
With respect, the classifications into commercial, non-commercial and extra-budgetary funds have been poorly thought out. The classifications give a sense to the non-commercial and extra-budgetary funds to look to government for bailouts and use the fact that they are not commercial as an excuse to bring out a string of losses year in year out – while government itself is without financial ability to post-bailout without causing harm to any of its priorities.
This article does not delve into the intricacies of the classifications, save to state that, the classifications have no bearing on the success of public enterprises. That is, in themselves, classifications merely change the shareholding mechanisms from those an enabling statute or document may have provided for. To this end, for all commercial public enterprises, many of which are companies proper, the shareholder is the minister responsible for public enterprises – this is an automatic amendment to enabling statutes or documents providing differently.
Yes, non-commercial public enterprises and extra-budgetary funds have different shareholders as their enabling statutes or documents may provide. This is to an extent not conclusive as the minister responsible for public enterprises remains the ‘principal’ minister for all public enterprises, regardless of classification.
Public enterprises must be controlled and managed to achieve their respective mandates, and always in the public interest. Since public enterprises are a province of Cabinet, and the President as Head of State, known poor performance of public enterprises in Namibia is what Cabinet and the President would want. Surely, something would have been done by now.
The State Capture Inquiry in South Africa has revealed that poor performances of public enterprises are rooted in ruling parties, first. In Namibia, a strong suspicion stands unless dispelled, that the ruling party through its various structures which represent and infiltrate the government machinery, has been making poor board appointments – by appointing those loyal to them, in turn, board members are commanded as to whom to appoint as chief executive officer. The above may probably not be completely pervasive, but certainly may be the case where poor performance in public enterprises has been observed over a period without any remedy.
That a plethora of public enterprises is moribund, not a surprise. We knew we were coming to this state of affairs – it is the unavoidable consequence of poor appointments that have been made in many public enterprises. Accordingly, any appointments made by a compromised board are likely to be poor. And there is enough proof in Namibia, as most public enterprises are loss making. Some public enterprises are publicly funded. In the above category, it may be difficult to tell if a loss has occurred as there is no sale of any product or services but an examination of how the funds are being deployed can reveal the nature of leadership in such public enterprises.
Some features of the PEGA are well constructed. For instance, the dismissal of boards and chief executive officers for poor performance. This will require consistent and objective implementation across public enterprises. However, the PEGA falls short of providing for how governance would be transformed. For example, there are no detailed, transparent and objective procedures for appointing board members and chief executive officers to public enterprises, among others. A number of boards in Namibia were merely handpicked, this manner of conducting appointments for such critical roles is disappointing, embarrassing and undermines any resolve to govern public enterprises properly.
The best candidates for board and chief executive positions can only be known after an open, transparent process which is based on auditable and verifiable merit for appointment. Hand-picking directors because they are well-known is wrong – by any standard – a famous person is not the best in the room unless they have been made to compete with others and still come out the best. In Namibia, it does appear some appointments are concluded way before the actual appointment happens, some steps are merely a formality.
Of critical concern is the appointment of chairpersons, given the important leadership role for the position. Chairpersons appointments in public enterprises must be subjected to further examinations to determine competence for the role. It has been observed that shareholder Ministers push compromises into public enterprises through a chairperson they handpicked. The status quo is because there are no objective criteria for appointing board chairpersons in public enterprises – the shareholder Minister simply handpicks. One myth must be jettisoned from circulation – that shareholder Ministers think they are shareholders to a point of accommodating personal decisions and interests within the affairs of public enterprises. The Constitution tells us – public enterprises are to be controlled and managed in the public interest. Shareholder Ministers are symbolic and representatives of the public, so, their sole interest would be that of the public enterprise which must be controlled and managed in the public interest.
If the minister responsible for public enterprises is serious, he will make sure there is merit in the appointment of boards and chief executive officers in all public enterprises. He will ensure competent persons are appointed to boards and the position of chief executive officer. If he allows any handpicking to go on by anybody including the President, he can kiss goodbye any ambitions of transforming public enterprises in Namibia.
It is said the minister himself oversaw the promulgation of the PEGA which omits basic standardised procedures of appointing boards and chief executive officers – the omission will prove costly to Namibia sooner than later and should be remedied through an amendment or regulations. For now, the minister should be informed that his ambitions are probably coming from a good place, but the results will tell. So, they will remain all talk and no action.