…Hybrid Governance Model set for September 11 tabling
By Hilary Mare
A repeal of the Public Enterprises Governance Act (PEGA), No. 2 of 2006 as amended, with the new 2018 PE Governance Bill which seeks to bring into force a new hybrid governance model for public enterprises have now been completed, the Ministry of Public Enterprises has revealed.
In 2016, Cabinet adopted the hybrid model that distinguishes between four primary categories, namely commercial public enterprises; non-commercial public enterprises and financial institutions; and extra-budgetary funds.
In the Hybrid model, the administration i.e appointment of Boards, approval of budgets and supervision of the various groups of non-commercial public enterprises will be the responsibility of the respective portfolio ministries, while for commercial public enterprises, the Ministry of Public Enterprises (MPEs) will henceforth execute full shareholder rights (i.e. appointments of Boards, Approval of Business Plans and Budgets).
“Once the Act is passed, the Hybrid governance Model will be implemented or enforced, whereas Commercial PEs will fully resort under the MPE, Non-Commercial will remain and report to their portfolio Ministers and Extra Budgetary Institutions will resort under the Ministry of Finance. Governance oversight of Non-Commercial and Extra Budgetary Institutions remains a function of MPE,” Johnathan Swartz, Chief Public Relations Officer in the Ministry of Public Enterprises told Confidente this week.
Until the new law is enacted, the dual governance model remains in place , where PEs are required to report to both the Line Minister as stipulated in their establishing Acts and to MPE as stipulated in the PEGA Act No. 2 of 2006.
Public Enterprises Minister Leon Jooste introduced the Hybrid Governance Model in a bid to restore order in a chaotic sector that has experienced a plethora of challenges.
Jooste has been widely quoted in the media expressing optimism that the new model, a departure from the Dual-Governance Model and which has been touted by some as a necessary evolution of the crucial public sector, holds the potential to significantly reduce total public enterprises debt, currently estimated at about N$43 billion and increase the sustainability of commercial enterprises.
Criticism of the Dual-Governance Model is anchored around the fact that all public enterprises – from trusts, commercial entities, regulatory bodies, funds to educational institutions such as the University of Namibia (Unam) – were all governed using the same model.
Under the dual-governance model, the responsibility of monitoring and the governing of PEs were shared between the portfolio or shareholder ministries and the state-owned enterprises council chaired by the prime minister.
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