Hybrid governance model urgent- Jooste

By Hilary Mare

PUBLIC Enterprise Minister Leon Jooste has said the implementation of a “hybrid governance model” through the new Public Enterprise Governance Act is a matter of urgency that cannot be delayed.

Addressing the National Assembly on the Public Enterprises Governance Bill of 2018 that seeks to repeal the Public Enterprises Governance Act of 2006, Jooste remarked that the Ministry of Public Enterprises has spent countless hours analysing and diagnosing the core reasons for the failure of most public enterprises (the commercial public enterprises in particular) and found that the main reason is “the dual-governance” structure.

He argued that implementing a centralised ownership model for public enterprises would be a visionary move.

Jooste said he was convinced that the promulgation of this law would free the Ministry of Public Enterprises to fully embrace its intended mandate, and confidently pledged that his ministry was more than willing and able to execute its mandate.

“Our portfolio of public enterprises has a total asset value of N$93 billion (as at 30 June 2018), employing some 17,224 people. Total liabilities, however, stand at N$44 billion leaving a net asset value of N$49 billion. Our commercial PEs have a N$62 billion asset value, N$30 billion liabilities, annual income of N$23 billion, expenditure of N$21 billion and a profitability of N$1.9 billion, which gives us a return on assets of only around 1.2 percent,” Jooste reported.

“The reform of our public enterprises is the key to unlock and facilitate the revival of the Namibian economy at a time when it is sorely needed. Dear Honourable Members of the House, I plead with each and every one of you not to prolong this process unduly and to enable us to implement the intended measures without any further delay,” Jooste told Parliament last week.

“The introduction of the hybrid governance model through the new Public Enterprises Governance Act will provide the Ministry of Public Enterprises with the optimum institutional and organisational infrastructure to reform our public enterprises without escalating cost.

“The model will allow for the Ministry of Public Enterprises to become more focused and specialised with an appropriate structure and skills to be a professional active shareholder representative for the State.

“This Bill is the obvious next step in the evolution of the Namibian public enterprises landscape and it leaves room for further evolution/refinement – if the need arises.

“This Bill represents a revolutionary, yet necessary reform of the public enterprises sector and the implementation thereof will guide us towards further enhanced efficiencies and performance outcomes.”

Jooste also noted that over the past three years the Ministry of Public Enterprises undertook several benchmarking missions – all of which have proved invaluable. “Globally, governments are centralising the ownership of their state-owned enterprises to strengthen the shareholder oversight functions of the State, and our approach has been endorsed in every country we’ve visited. The implementation of the Public Enterprise Governance Act 2018 will exponentially strengthen the ability of the State to become a professional shareholder of the public enterprises on behalf of the nation.

“We shall introduce multiple measures to eradicate mismanagement, corruption and overall poor performance to effectively enhance shareholder value and to ensure the efficient and effective supply and delivery of services and products on behalf of the State. Consolidating these functions into a single entity is the only way to ensure that uniform oversight, accountability, compliance and performance monitoring takes place, while the critical commercial public enterprises will no longer be confronted with the challenge of dealing with more than one shareholder representative,” he proposed.