Public enterprises minister Iipumbu Shiimi yesterday slammed some State-owned enterprises for their mediocre performance and ineffective service delivery.
It is something that affects national competitiveness negatively, an enormous drain on the fiscus at a time when the country is experiencing economic difficulties, he said.
“Many of our public enterprises (PEs) are struggling, so there is almost a crisis every day at PEs. Every day, we are confronted with one of them that needs money. That cannot be the future,” charged Shiimi as he was launching the PEs ownership policy consultations.
Namibia currently owns 81 PEs, consisting of commercial and non-commercial entities.
The total asset value of commercial PEs stands at N$120 billion, liabilities at N$60 billion and the net value assets at N$60 billion.
The employment count stands at 25 000.
“We need to manage PEs in a way that corruption is minimised. If we don’t manage this disease called corruption, we will forever have crises in public enterprises. We will not be able to transform the economy. We expect them to contribute to economic development, but several of them depend on the fiscus, which is not supposed to be the case,” said the concerned Shiimi.
The minister mentioned that it is worrisome that these enterprises compete with resources that government has, which are supposed to fund critical public goods.
The ultimate purpose of the State’s ownership of PEs is to maximise value for society through the efficient allocation of resources. Consequently, the policy provides the public and private sectors with a clear understanding of the State’s overall objectives and priorities as a shareholder of PEs.
Also, it clarifies why, when and how the State should own public enterprises, outlines measures to ensure sound financial management and sustainability, outlines measures to curtail any forms of corruption and other irregularities, and outlines the roles and responsibilities of the board of directors and management.
According to a draft policy document, it is essential to ensure that PEs are competitive and efficient for economic development and public service delivery.
“When managed transparently and efficiently, PEs can help rectify market failures, improve public service delivery and contribute to fairer, more competitive markets,” it reads.
Furthermore, a report from the World Bank last year observed that the dominance of SOEs in a small economy, such as Namibia, creates an anti-competitive effect.
This, the bank said, is particularly so when these SOEs operate in privileged positions in key sectors where private participation could be more efficient and transformative.
“Despite having a much smaller market size than most Organisation for Economic Co-operation and Development (OECD) countries, Namibia has the same number of SOEs as the OECD average,” stated the World Bank.
Moreover, the bank noted that Namibian SOEs have 90% to 100% of the market share in electricity generation and imports, fixed-line telecommunication services, postal services (other than couriers), air operation infrastructure, maritime transport infrastructure and railway transportation, road infrastructure, water supply and mobile telecommunications.
Furthermore, the Namibia Country Private Sector Diagnostic report states there are 22 designated commercial SOEs in the country (out of a total of 81 SOEs) across at least 15 sectors. - mndjavera@nepc.com.na