WINDHOEK – Public enterprises minister Leon Jooste said the new legislation forming part of government’s drive to reform and restructure state-owned enterprises (SOEs) would be finalised by March next year.
The proposed framework, the Public Enterprises Governance Act, will also focus on the transformation of parastatals, the process entailing the appointment of boards of directors, their performance and remuneration, and regulations for board meetings, amongst others.
For SOEs to be successful and achieve their mandates, Jooste said this can only be done through a well-established performance agreement plan, which will be cascaded from top to bottom.
Equally, he said, the new legislation will also deal with the aspect of monitoring the performance of boards of directors and the executives.
Jooste noted the other component includes the incentivising of performing members, unlike the current system where executives and board members pocket exorbitant salaries and sitting fees – despite the poor quality of performance.
Currently, many board members and their executives are not being held accountable for losses incurred at SOEs they are entrusted to head.
Against this, he said, the new legislation makes provision for non-performing board members and executives being removed from their jobs.
Although SOEs were created to generate funds through the provision of goods and services to the public, many of them have become a burden.
But Jooste is optimistic that if all these components work together it will create a performance culture within SOEs. In April, Jooste also announced SOEs collectively owed a massive N$43 billion in debts, which amounts to 25 percent of GDP.
Accountability is another issue he highlighted, adding they will be measuring the level of good governance.
“We want to inspire people to perform and not threaten people by punitive measures. The new legislation will be activated very soon by the way. There is a strong provision of accountability both at the board and at the executive level. Board members will enter into performance agreements. The KPIs [Key Performance Indicators] in the performance agreement will be aligned to the business plan which we approved,” he said.
Jooste said the new legislation also makes provision for consequences to be faced by redundant or non-performing SOEs through mismanagement by executives.
“If we get it right to appoint the right people, especially at the board level, then I for one would be very sad to use any of those provisions I just mentioned in the legislation. They are captured in the law for a good reason, obviously looking at the history of many of our SOEs unfortunately,” Jooste said.
He suggested that if the right board members to oversee SOEs are identified and recruited, then the harsh provisions in the legislation would not have to be applied.