Jooste announces SOE shake-up
Minister of Public Enterprises Leon Jooste yesterday unveiled his grand vision for the country’s state-owned enterprises (SOEs), a plan that involves his ministry applying itself much more in the affairs of these entities.
Describing it as a “game changer”, Jooste introduced journalists in the capital to a “hybrid governance model for Namibian public enterprises” that was adopted by Cabinet on Tuesday following 16 months of research, benchmarking and consultation.
“The model we are proposing is the obvious next step in the evolution of the governance of public enterprises and strikes the most ideal balance between being revolutionary, yet subtle,” Jooste told the press conference.
Elaborating on the need for this new strategy, Jooste noted flaws in previous models ranging from ineffective monitoring, lack of oversight abilities and complex governance structures.
Namibia had started off following a completely decentralised approach where individual portfolio ministers were responsible for all functions, before the State-Owned Enterprises Governance Act of 2006 resulted in the formation of a central governance agency under the Office of the Prime Minister (OPM).
That development, he explained, led to a dual-governance model which saw monitoring and governing responsibilities of public enterprises shared between portfolio ministries and the State-owned Enterprises Governance Council.
“The Ministry of Public Enterprises has been operating within this governance model since 21 March 2015, and the obvious failure of this model has become profoundly evident,” Jooste said.
Splitting power
A key element of the new “hybrid governance model” is that it separates public enterprises into three categories, namely commercial, non-commercial and extra-budgetary funds or financial institutions.
A commercial public enterprise is defined as “an entity wholly or partially owned or controlled by the state, which, guided by market principles, is to provide a product or render a service in the best interest of the public, and has the potential to generate a sustainable profit while promoting economic growth and fulfilling its mandate.”
These institutions, Jooste said, would be wholly accountable to his ministry in terms of commercial and financial operation and performance.
Non-commercial public enterprises, including regulators, advocacy and research bodies and media institutions, would ultimately be accountable to their portfolio ministries, while still adhering to the Ministry of Public Enterprises’ generally accepted common principles and guidelines on corporate governance, reporting and remuneration.
All entities of financial nature and extra-budgetary funds – such as the Motor Vehicle Accident (MVA) Fund and Road Fund Administration (RFA) - now fall under the Ministry of Finance.
“The model addresses a current unfavourable structure, where line ministries controlled policy and legislative formulation, regulation and implementation. In other words, acting as coach, referee and player, creating a potential indirect conflict of interest,” Jooste said.
He expressed confidence in his ministry’s capacity building over the past year, saying all efforts were made to equip staff with the right skills to guarantee its status as an effective, technical shareholder to those institutions under its jurisdiction.
DENVER ISAACS
Describing it as a “game changer”, Jooste introduced journalists in the capital to a “hybrid governance model for Namibian public enterprises” that was adopted by Cabinet on Tuesday following 16 months of research, benchmarking and consultation.
“The model we are proposing is the obvious next step in the evolution of the governance of public enterprises and strikes the most ideal balance between being revolutionary, yet subtle,” Jooste told the press conference.
Elaborating on the need for this new strategy, Jooste noted flaws in previous models ranging from ineffective monitoring, lack of oversight abilities and complex governance structures.
Namibia had started off following a completely decentralised approach where individual portfolio ministers were responsible for all functions, before the State-Owned Enterprises Governance Act of 2006 resulted in the formation of a central governance agency under the Office of the Prime Minister (OPM).
That development, he explained, led to a dual-governance model which saw monitoring and governing responsibilities of public enterprises shared between portfolio ministries and the State-owned Enterprises Governance Council.
“The Ministry of Public Enterprises has been operating within this governance model since 21 March 2015, and the obvious failure of this model has become profoundly evident,” Jooste said.
Splitting power
A key element of the new “hybrid governance model” is that it separates public enterprises into three categories, namely commercial, non-commercial and extra-budgetary funds or financial institutions.
A commercial public enterprise is defined as “an entity wholly or partially owned or controlled by the state, which, guided by market principles, is to provide a product or render a service in the best interest of the public, and has the potential to generate a sustainable profit while promoting economic growth and fulfilling its mandate.”
These institutions, Jooste said, would be wholly accountable to his ministry in terms of commercial and financial operation and performance.
Non-commercial public enterprises, including regulators, advocacy and research bodies and media institutions, would ultimately be accountable to their portfolio ministries, while still adhering to the Ministry of Public Enterprises’ generally accepted common principles and guidelines on corporate governance, reporting and remuneration.
All entities of financial nature and extra-budgetary funds – such as the Motor Vehicle Accident (MVA) Fund and Road Fund Administration (RFA) - now fall under the Ministry of Finance.
“The model addresses a current unfavourable structure, where line ministries controlled policy and legislative formulation, regulation and implementation. In other words, acting as coach, referee and player, creating a potential indirect conflict of interest,” Jooste said.
He expressed confidence in his ministry’s capacity building over the past year, saying all efforts were made to equip staff with the right skills to guarantee its status as an effective, technical shareholder to those institutions under its jurisdiction.
DENVER ISAACS
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