Public enterprises (PEs) must not be used as instruments for financing or otherwise benefitting politically partisan activities. As such, PEs should refrain from making financial or any other contributions to political organisations, as this practice is strictly prohibited.
This stance is included in the draft policy document, dealing with the PE ownership policy, that was shared earlier this week. Over the years, State-owned enterprises (SOEs) have been questioned for their roles in corruption, nepotism, mismanagement of public funds and abuse of power.
“Corruption and other irregular practices cause PEs to suffer financial loss, or brand and reputational damage, as well as distorting markets, eroding public trust and causing the degradation of domestic and foreign investor confidence,” the draft policy reads.
The draft expounded that the State aims to ensure PEs are owned, managed and governed in a manner that prevents incidents of corruption and other irregular practices, including fraud, bribery and unethical conduct.
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 public and private sectors with a clear understanding of the State’s overall objectives and priorities as the sole PE shareholder.
“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 a concerned Shiimi recently.
Namibia currently has 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 about 25 000.
On Tuesday, while delivering his FY2023/24 mid-year budget review statement, PEs minister Iipumbu Shiimi expressed his displeasure with State businesses, emphasising that funding these indefinitely diverts revenue away from vital social investments like social protection, housing, healthcare and education.
Emphasising that the situation at some public enterprises warrants urgent and bold action to ensure sustainability, Shiimi said: “The fiscal risks from the operations of public enterprises have increased significantly through both requests for budgetary allocations as well as settlement of government guaranteed loans”.