Old contracts force NBC to exceed executive pay limits

Information and communication technology minister Emma Theofelus says executive salaries at the Namibian Broadcasting Corporation (NBC) that exceed government’s pay cap are due to employment contracts signed before the Public Enterprises Governance Act (PEGA) came into effect.

The issue came under scrutiny after NBC again received an adverse finding by the Office of the Auditor General report, which flagged salaries paid above the approved threshold during the 2023 and 2024 financial years.

Responding to questions in parliament recently, Theofelus said the matter stems from contracts concluded before the governance framework introduced remuneration ceilings for public enterprises.

She said when the law took effect in 2019, public enterprises were categorised into different tiers, each with a specific payment cap for executives.

However, she said at that time, some contracts at NBC had already exceeded those thresholds.

Theofelus told lawmakers that reducing the salaries of employees while they are still bound by existing contracts presents a challenge.

“It was difficult for management and the board, in the middle of an employment contract, to actually reduce the salary of that person. That is why that issue keeps on appearing in the audit report,” she explained.

Audit findings

Three weeks ago, Namibian Sun reported that executives at NBC were paid up to N$1.5 million above approved remuneration bands, in violation of PEGA and without the required approval from the responsible minister.

The revelation was made by the auditor general Junias Kandjeke in NBC's audit report for the financial year ended 31 March 2024.

Kandjeke issued an adverse audit opinion, stating that due to the significance of the matters raised, the financial statements do not present a true and fair view of NBC’s financial position as at 31 March 2024, nor of its financial performance and cash flows for the year.

“The auditors noted that some members of management were remunerated N$1 480 090 above the remuneration bands as per Section 4 of the Public Enterprises Governance Act, 2019", Kandjeke wrote in the report.

In the previous financial year, NBC managers were reportedly paid up to N$750 000 above the approved bands, in contravention of the same Act.

Dangerous precedent

Independent Patriots for Change (IPC) parliamentarian John-Louw Mouton questioned why the issue persisted despite the ministry stating that it had given the matter its “highest attention”.

He argued that allowing the institution to continue paying above the threshold creates a dangerous precedent for other public enterprises.

However, Theofelus insisted the ministry is addressing the matter and that compliance will be achieved once the affected contracts expire. “The only thing we can do now is to allow those contracts to run their course,” she said.

She added that new contracts negotiated from 2025 onwards will align with the remuneration limits set for the public enterprise under the governance law.

The minister also stressed that her ministry engages NBC regularly on governance issues, with the executive director meeting NBC’s management quarterly to monitor compliance.

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