By Max Hamata
ALL parastatals will now effectively resort under the Ministry of Public Enterprises after Cabinet approved a hybrid Governance Model for Namibian Public Enterprises on Tuesday.
Tuesday’s Cabinet session, chaired by Vice President Dr Nickey Iyambo abandoned the dual governance model for State-owned enterprises and adopted a new hybrid centralised governance model, which classifies public enterprises as commercial, non-commercial and financial.
In this model, commercial public enterprises will be fully centralised under the Ministry of Public Enterprise whilst non-commercial enterprises will reside under designated line ministries and financial enterprises will be placed under the Ministry of Finance.
This substantially means that the Ministry of Public Enterprises, led by Leon Jooste will effectively take charge of the 18 commercial public enterprises, inclusive of Namibia Airports Company (NAC), Nampost, Namcor, Roads Contractor Company, TransNamib Holdings, Air Namibia, Roads Authority (RA), National Institute of Pathology, Namibia Ports Authority, Namibia Wildlife Resorts (NWR), Meat Cooperation of Namibia, Epangelo Mining, Luderitz Waterfront, Henties Bay Waterfront, Zambezi Waterfront, ODC and NDC jointly.
Confidente has learnt that the Ministry of Public Enterprises has been given “full shareholder rights” for all commercial public enterprises by Cabinet, which will be wholly accountable to the Ministry in terms of commercial and financial operations and performance.
Key oversight functions as per the PEGA include the appointment of Boards, enforcement of good corporate governance through governance and performance agreements, critical review of business and financial plans, approval of annual budgets, issuance of remuneration directive for boards and management, commission of special investigations as and when necessary, guidance and approvals during restructuring of Public Enterprises.
The 38 non-commercial enterprises inclusive of regulators, promotion, development, advocacy and research bodies, educational and training institutions, media institutions and service providers will continue to reside under their respective line ministries with portfolio ministers responsible for enforcing full accountability for commercial and financial operations and performance of these entities with full adherence to the Ministry of Public Enterprises’ generally accepted common principles of good corporate governance and reporting.
Similarly, the 11 financial institutions and extra-budgetary funds will reside under the Ministry of Finance which will enforce full accountability for commercial and financial operations and performance of these institutions.
In Confidente’s inquiry as to some of the reasons why Cabinet decided to discard the dual governance model that the 72 public enterprises as listed in the current schedule of the Public Enterprises Governance Act amended in 2015 were using, Confidente unearthed that the decentralised model had posed challenges to do with execution of ownership powers, monitoring and access to key financial information, lack of oversight abilities, ineffective communication and information sharing; and that mandate was not geared towards execution and a complex reporting and governance structure.
In sharp contrast, the adopted hybrid model is said to ensure that ownership powers are defined and utilised to ensure performance aligned to mandate, centralised and standardised access and monitoring of financial information, clear mandate empowering all parties towards operational execution and reducing reporting layers and establishing accountability.
The model also highlights that centralised expertise provides cost effective and consistent oversight while it is more effective and efficient in communication and removal of conflict of interest.
Confidente. Lifting the Lid. Copyright © 2015