• February 17th, 2020

SOEs trapped in N$43 billion debt

WINDHOEK – State-owned enterprises collectively owe a massive N$43 billion in debts, which equals 25 percent of GDP.
What worries Public Enterprises Minister Leon Jooste even more is that commercial SOEs, from which the government expects to receive dividends, collectively received N$1.2 billion from Treasury in bailouts for the 2017/18 financial year.
Motivating his ministry’s budget in parliament last week, Jooste said: “It concerns us all as leaders of this great nation that the total debt of the country’s SOEs is already about N$43 billion…”

The total return on the assets of the SOEs portfolio is negative, said the minister, with a total loss now exceeding an unsustainable N$150 million per annum.

This, according to Jooste, indicates clearly and in no uncertain terms that the current levels of performance and financial results emanating from most SOEs are alarmingly low and just not sustainable.

“The mandate of the MPEs [Ministry of Public Enterprises] is to position Namibia’s key public enterprises to play their meaningful role in the country’s development agenda and to ensure the public enterprises are well managed in order to reduce the financial burden on the state,” he said.

For 2019/20, the public enterprises ministry was allocated N$40 million. This represents a 4.21 percent reduction compared to the 2018/19 revised budget.

Jooste, whose ministry now has the full mandate for commercial SOEs, told lawmakers that of the N$40 million budget N$7 million will be channeled to legal, economic and financial advisory services.

He said the main activities to be carried out under the programme include among others, the drafting of legislation for the Public Enterprises Governance Act, 2019, harmonisation of individual establishing act of the public enterprise governance bill, 2018 and the implementation of the governance scorecard.

Jooste said an amount of N$24 million has been allocated to policy coordination and support services of the ministry.
He said under policy coordination and support services his ministry will, among others, develop the ownership policy, develop the Public Enterprises Transformation Strategy and develop and implement the Board Performance Evaluation Framework. 

Jooste said the ministry has reached a number of milestones, which include the Public Enterprises Governance Act No. 2 of 2019, which was passed, and the drafting and the finalisation of the Public Enterprise Policy Framework, Guidelines and Directives and E-recruitment system procurement.

Jooste says during the course of this year the ministry will, among others, focus on the finalisation and implementation of the transformation strategy and ownership policy, and the categorisation of public enterprises.

Kuzeeko Tjitemisa
2019-04-30 09:01:10 | 9 months ago

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