By Petronella Sibeene WINDHOEK President Hifikepunye Pohamba has strongly condemned parastatal companies that are swift in requesting government to subsidise their operations and yet drag their feet when it comes to paying dividends due to the State. Pohamba described the current unsustainable financial trends at these parastatals as worrisome. Although he declined to reveal names of the culprits, the President says that some State-owned entities have throughout their existence asked government for subsidies for them to pay out their executives. But the same entities never pay dividends to their shareholder. “It can no longer go that way. We will have to restructure based on the law,” said Pohamba. The President strongly stated that every business should pay dividends to its shareholder. In the same vein, he warned that businesses should never be run on the basis of subsidies. Over the years, records have shown that contributions from parastatals to the Treasury were not satisfactory. To address the situation, the formulation of a Dividend Policy would require priority. Meanwhile, Pohamba concurred with Prime Minister Nahas Angula’s sentiments as expressed in a recent interview with a local magazine, Insight. The Prime Minister revealed that two years ago an institution which can oversee the needs and operations of State Owned Enterprises (SOEs) was created. The situation was necessitated by the mismanagement of funds in most companies especially relating to fat salaries scaled up for chief executive officers. “It should not be automatic that if I am a CEO I should earn N$1 million a year. You cannot have a situation whereby a CEO is being paid more than the president of the country,” said Angula. He reiterated that companies will have to be restructured and self-enrichment must be brought to an end. The President said Angula’s sentiments were the government’s stance on this issue. Permanent Secretary in the Ministry of Finance Calle Schettwein once announced that government planned to introduce targeted subsidies, instead of general subsidies, for parastatals. This was because the country’s parastatals are in dire need of tight controls to stem the wastage of money through fraud, adding that some parastatals could retain the money for development of their companies. The 2005/2006 Budget’s subsidies to parastatals were reduced substantially. Minister of Finance Saara Kuugongelwa-Amadhila said to introduce reforms at SOEs an SOE Bill has since been drafted. The bill would regulate the management of parastatals in an effective manner and will strictly monitor efficiency and competency in the over 50 SOEs in the country. Last year, parliament passed an SOE Act although there are some legal issues that need sorting out before the Act can become operational. The Act deals with issues such as dividends policy, performance agreements and remuneration packages of chief executive officers. Under this direction, parastatals would be expected to enter into performance-based contracts and what criteria and qualifications the SOE should have must be outlined. The bill will provide government with a legal framework against which to measure the competency and efficiency of SOEs. This would assist the government with putting into action the various statements made by the President on efficient public service delivery. The bill will also determine the duties and functions of the Central Governance Council. Under the SOE Bill, emphasis will further be placed on improving the efficiencies of boards of directors if necessary, through their attending a College for Directors or even undergoing an induction course similar to what new parliamentarians go through to acquaint themselves with what is expected of them in their positions. Pohamba spoke during a recent familiarization tour at Telecom Namibia.