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Home / Ithete sounds warning to non-performing SOEs … As NamibRe declares N$5 million dividends
Ithete sounds warning to non-performing SOEs … As NamibRe declares N$5 million dividends
2018-02-22Staff Report 2 Edgar Brandt Windhoek-Deputy Finance Minister Natangue Ithete yesterday sounded a warning to ill-managed and underperforming public enterprises, as well as entities and individuals defaulting on tax payments, that their time is running out. The same shot was parted in the direction of publicly-funded institutions overcommit government resources to unbudgeted expenditure. Ithete made the remarks yesterday as he received a N$5 million cheque in dividends from the Namibia Reinsurance Corporation (NamibRe), for the financial year ended March 31, 2017. The NamibRe dividend, which was declared at the company’s Annual General Meeting in December last year, was welcomed by Ithete, particularly in the face of tough economic challenges experienced by the domestic economy. The N$5 million dividend equates to 23 percent of NamibRe’s net profits for 2017. This brings the total returns paid to the shareholder, from 2014 to 2017, to N$12.3 million. “Most of our SOEs [state-owned enterprises] have been in existence for 25 or 28 years yet have never paid a dividend to government. This is unacceptable, especially for SOEs in commercial and economic sectors,” he said. “As an individual, one cannot own and keep a company for 25 years or more that does not bring returns, so why should government?” He added that public enterprises were not established to be cost-liabilities with constant bailouts but were created for tough times to assist government in growing the economy and to provide affordable services to industry and the public at large. “Some of these institutions are failing us all as the nation and beneficiaries of their mandates. Continuous bailouts by the state is unsustainable. I urge all line ministries to use their power as shareholders of these parastatals and demand returns,”Ithete stated. He continued that numerous public enterprises are in tax arrears but yet they deduct Pay As You Earn (PAYE) from their employees and charged that some do not comply with other statutory tax obligations, such as withholding taxes on services paid to non-residents and deducting PAYE from director’s fees. Such practices, he said, should cease forthwith. “We cannot be lenient with these mismanagement tendencies. It is now time to use all accountability provisions under the existing acts, policies and the Namibian laws to curb all wastage and unnecessary costs. All manners of underperformance, mismanagement and overspending in public enterprises and government should be frowned upon and those guilty of such should face disciplinary actions and charged accordingly,” said Ithete. At the occasion, Ithete commended NamibRe for consistently declaring dividends to government, specifically amidst a myriad of economic challenges. “Since I joined the Ministry of Finance in 2015, each year I have witnessed the handing over of dividends from NamibRe and not once have I heard of you asking for bailouts,” he told its management. Handing over the dividend cheque to Ithete, NamibRe’s board chairperson Libertha Kapere noted that as is expected from any business, NamibRe is required to declare dividends to its only shareholder, the government. She explained that for NamibRe, the expectation of dividends is in fact entrenched in the corporation’s establishing Act and its own dividend policy. “Over the years we have witnessed a gradual and sustained increase in the dividend amount declared to our shareholder. This means that NamibRe is performing as per the expectation of the shareholder and, more often than not, exceeds that performance,” said Kapere. 2018-02-22Staff Report 2
