2017-08-11Staff Report 2 Secretary to Cabinet George Simataa discusses with Toivo Ndjebela issues around the liquidated SME Bank and the removal of his board, which he contested with little success in court. Toivo Ndjebela (TN): You’ve been secretary to Cabinet since 2015, having previously served as a permanent secretary in two different ministries. How have you settled in? George Simataa (GS): Experience has shown me that you cannot settle in a job. Settling in makes people comfortable and complacent. And that’s when problems start. It’s a challenging job, because you’d be juggling between many things. You’re the head of all 27 permanent secretaries and you must, therefore, be familiar with everything that happens in those ministries. It’s a difficult but exciting job. TN: What are your key functions as secretary to Cabinet? GS: The secretary to cabinet derives his powers from Article 43 of the Constitution. The president appoints the secretary to Cabinet. The function, in terms of that article, is to keep records of Cabinet. But Section 10 of the Public Service Act defines his role as the head of the public service and must provide supportive roles to the president and prime minister. I must, in terms of law, also provide administrative and technical support to the Public Service Commission and other commissions established, such as the POBC (Public Office Bearers Commission). TN: You served as permanent secretary of the Ministry of Works and the Ministry of Labour. What were the highlights of your work at both ministries? GS: The one exciting job was at the Ministry of Works. I worked with many people, including international contractors. The upgrading of the Hosea Kutako airport by installing a radar - which is the only one of its kind in Africa - was one such highlight. We also upgraded the Walvis Bay airport to international standard. Another highlight was the acquisition of the A319 airbuses for Air Namibia. When we were constructing the Walvis Bay airport we took the contractor to court. In terms of upgrading roads from gravel to bitumen, we did the MR125, which is the Linyanti-Kongola road, Tsumeb-Katwitwi road, Nkurenkuru-Eenhana road, upgrading of the Okahandja-Karibib road and Omakange-Ruacana road. We completed many other smaller roads. In terms of rail transport, the Ondangwa-Oshikango rail was done during my time, though it was challenging. Regarding rehabilitation, we successfully worked on the Kranzberg-Tsumeb railway and the Aus-Luderitz railway. On sea transport, we worked on the new container terminal and ship repair quarry you see today – [these] were conceptualised during our time. We also helped people in the Zambezi, who struggled crossing the Zambezi River to Impalila island from Katima Mulilo by, after a Cabinet decision, acquiring a river watercraft. We had it manufactured and commissioned. At the Labour Ministry it was a holiday for me. There was nothing to do. There were a lot of politics in moving me to that ministry. It was a punitive decision, but I thank them because that’s when I got time to complete my PhD. TN: There were always perceptions about you when you worked at the Ministry of Works, that somehow you were personally benefitting from the big tenders you were handling. How do you respond to that? GS: Look, when you work at an economics ministry - whether the Ministry of Works or others that deal with a similar magnitude of contracts - you are likely to be perceived as someone benefitting from such contracts. The Ministry of Works was getting about N$8 billion annually for infrastructure development. There were a lot of committees. The architects, the lead consultant, would be appointed to do initial evaluation and then make a recommendation to government. The matter then comes to the technical committee and then the ministerial committee. The checks and balances were just too many. You could never circumvent all these processes. I was accused. When Peter Mwatile went there, he was accused. The current PS, Mr Goeieman, came at a time of recession, so nothing much has been said about him. It’s all about perceptions. TN: It is often said that you are a wealthy man. Could some of these perceptions be coming from your said wealth? GS: We’d need to prove that one. Wealth is looked at through one’s balance sheet. I don’t consider myself wealthy. I struggle like all Namibians and what I have I’ve worked for. I’ve gone to banks to borrow money. I have never stolen in my life. My farm is worth about N$15 million and it’s one of the things that get me accused of self-enrichment. People think I bought it cash. My house in Katima Mulilo was bought with my own money. Long ago I bought a house in Pionierspark Extension 1, when getting a house was still easy. I was granted an extra bond and instead of extending my house, I went to build in my village. I am a man and I had to do all this. TN: What is your take on separation of powers between the arms of government, especially that ministers serve in both the executive and legislature? GS: We have chosen a multi-party democracy as a country. Our Constitution says you may not become a minister unless you’re a member of parliament. To change this, we’d have to change the Constitution. I haven’t seen any negative influence of the current arrangement on the legislature. Our legislature remains very powerful. TN: You recently issued warning letters to government officials involved in the coastal oil storage project. What informed your decision? GS: I don’t want to talk about that as it involves personalities. I can’t talk about that subject without having to mention names. I hope you understand. TN: You were until recently chairman of the now liquidated SME Bank. What really transpired there, such that N$200 million is allegedly lost? GS: The history of the SME Bank must be taken into account when discussing what has happened. When this bank was being formed, there was a lot of resistance from many stakeholders, such as the Bank of Namibia. I wasn’t there during the formation, but I have spoken to key people and have read the literature. Cabinet directed that there should be an SME Bank with the mandate to access finance to smaller enterprises – people who did not have to give collateral. This mandate should have informed the kind of licence the bank was to get. However, it transpired that the kind of licence they got was not any different from those of the existing commercial banks. That’s where the first problem started, because there was contradiction between the mandate and the kind of licence the bank got. In other words, the bank was giving out loans as per its original mandate [giving out loans without collateral]. They were giving out loans that were not secured, as per the mandate, but which was in violation of the Bank of Namibia’s licence conditions. Loan recipients had a period within which they were to start paying back the loans. When we were appointed to the board, the main issue at the time was non-compliance by loan recipients. We had more non-performing loans than those that performed. When payments are not made, this is reflected in the reports to the Bank of Namibia for regulatory purposes, as non-performing loans. Our view had always been that we needed to be lenient to these people, because they are into small start-up businesses, as per the mandate of the bank. It was at this point that we realised the licence we had is the wrong one. The second issue was about the share certificate, which the bank didn’t have. The bank was first registered as a cc (close corporation) and then as a PTY Ltd. The issue of ownership therefore wasn’t clear. The Zimbabweans have always said they needed the share certificate to comply with the requirements of the Zimbabwean Reserve Bank. They couldn’t move huge sums of money without that certificate. TN: So what happened to the N$200 million? GS: To be honest, I personally and other board members were not aware of this money having been invested anywhere. I first heard about this money in September 2016 when the Bank of Namibia governor [Ipumbu Shiimi] called me to say “Chairman, are you aware of this close to N$200 million invested in South Africa by your bank?” We are non-executive directors, who are not involved in the day-to-day activities of the bank. Management brings reports that contain the information that they want you to know about. I was not party to that decision and did not sign any papers in that regard. Around January this year, the governor wrote me a letter, saying we must get this money back. Since September, I’ve been asking about these investments and it was during my enquiries that I was informed that the investments were made during the tenure of the previous board. When I checked with my predecessor [former SME Bank chairman Frans Kapofi] whether there were minutes about this decision, he said such a decision was never taken by his board. TN: Is this the reason you contested your board’s removal in the High Court? GS: No, not at all. We had an issue with the illegal and unprocedural manner in which the governor removed us. I saw it as a way to tarnish my name. The press conference by the governor also made a lot of insinuations that we were to blame for this issue. Also, he did not have the authority to remove us. What he should have done was to inform the shareholder to remove us, instead of him doing so. It’s not his job. I’ve never cried to go back to SME Bank and, frankly I don’t want to go there. TN: Apart from the approach of the Bank of Namibia, do you at least agree with the general principle that they had to act to protect depositors’ money? GS: Oh yes. It’s our money and it had to be protected. That they acted was good, but I fundamentally disagree with the manner the matter was approached. TN: How do you feel about the 208 SME Bank employees, whose employment was recently terminated as a result of the bank’s liquidation? GS: I feel terrible. It’s a very unfortunate situation. In Africa, that 208 number has to be multiplied by ten, because generally we have at least ten dependents. That’s 2,000 people affected. When this matter was brought to the attention of President Hage Geingob in February, I was there with the governor and some ministers. The president requested that the matter must be left to government to engage authorities in South Africa and Zimbabwe, but this request was ignored. Maybe jobs could’ve been saved. 2017-08-11Staff Report 2
