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Jooste in limbo…as public enterprises ministry is dissolved

2021-11-19  Edgar Brandt

Jooste in limbo…as public enterprises ministry is dissolved
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Public enterprises minister Leon Jooste yesterday chose to be philosophical about his future and that of the ministry he helped establish in 2015. 

“Time will tell”, was all Jooste could say when asked for comment on his next move after his office released a statement to confirm that his ministry would soon be transformed into a Department of Public Enterprises, which will fall under the ambit of the finance ministry. 

He expects the process of dissolving the ministry to take around three months.

This follows a recommendation by the High-Level Panel on the Namibian Economy (HLPNE), appointed by President Hage Geingob, for this ministry to be phased out. 

“Shareholder functions will be greatly enhanced when the shareholder powers and budgetary functions are consolidated under the Ministry of Finance since they will then have direct oversight into the financial and operational performance of the public enterprises, and subsidies can then be more accurately aligned to compliance and performance. This will also allow the Ministry of Finance to take control of and be directly involved in the process leading to the establishment of the holding company, thereby creating critical institutional memory of the actual details of the process,” Jooste stated via a press release.   

He added that the decision is “based on technical facts and strategic rationale, where the consolidation and streamlining of operational processes will inevitably result in substantial cost- savings since a separate ministry will no longer have to be maintained. I am entirely convinced that this decision is in the best interest of the nation and the government, and that no momentum will be lost in our collective quest to transform the Namibian public enterprises”.

The PE minister added that most of the issues encountered at State-owned enterprises that warrant the intervention of the shareholder inevitably have a financial implication. 

Said Jooste: “These matters consequently require the consistent attention of the Minister of Finance, and many times end up on the agenda of the Cabinet Committee on Treasury (CCT). It is, therefore, obvious that it is in the interest of the Minister of Finance to always be acutely aware of the status of public enterprises. With this in mind, a strategic decision has been taken to transform the Ministry of Public Enterprises from an independent Ministry to a Department of Public Enterprises under the Ministry of Finance”.  

A hybrid governance model for public enterprises, approved by Cabinet in 2015, separated the role of the State as policy formulator, regulator and operator by centralising the ownership of commercial public enterprises under the Ministry of Public Enterprises, while non-commercial public enterprises resorted under the various line ministries as well as extra-budgetary funds under the finance ministry. 

“This model has proven to be extremely effective, with Singapore and Malaysia serving as early adopters, where a central holding company that becomes owner of all commercial public enterprises is established and reports to the Minister of Finance, in line with the provisions of the State Finance Act. The establishment of a holding company governance model was also recently recommended by the High-Level Panel on the Namibian Economy and endorsed by Cabinet as one of the approved recommendations,” Jooste explained. 

He added that the finance ministry would equally rely on the same level of support from all stakeholders to implement the transformation of the public enterprises, and to ultimately establish the public enterprise holding company within the next three years. 

“I have reason to believe that Namibia will take its place as a benchmark for the reform of public enterprises against which other countries will measure their achievements,” said Jooste. 

 

 

 

 

 

 

 

 


2021-11-19  Edgar Brandt

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