Public enterprises oversight decentralisation sparks governance concerns
• Line ministers responsible for the boards appointments
President Netumbo Nandi-Ndaitwah's administration dissolved the Public Enterprises Ministry previously responsible for acting as the central shareholder of commercial state-owned enterprises in March.
Eliot IpingeWindhoek
The recent dismantling of Namibia’s Ministry of Public Enterprises has cast a shadow of uncertainty over the future of governance, compliance, and performance management across state-owned enterprises (SOEs).
President Netumbo Nandi-Ndaitwah’s administration dissolved the Public Enterprises Ministry previously responsible for acting as the central shareholder of commercial state-owned enterprises in March, transferring its functions to individual line ministries in a significant shift to Namibia’s SOE oversight structure.
Despite this change, the legal foundation regulating public enterprises remains intact. The Public Enterprises Governance Act (PEGA) of 2019, which introduced governance and performance frameworks for SOEs, is still in force.
“Yes, PEGA is still relevant and in force until an amendment law is enacted,” finance ministry spokesperson Wilson Shikoto confirmed.
He added that Cabinet has already directed that PEGA be reviewed and amended to reflect the new governance structure.
While line ministries now oversee administrative responsibilities, Shikoto noted that overall governance continues to be managed by the Department of Public Enterprises within the Ministry of Finance.
Industry leaders raise concerns
Chairperson of the Public Enterprise CEOs Forum, Fluksman Samuehl, has voiced concern over the implications of the new decentralised model.
Speaking on NTV’s Business 7, Samuehl said the removal of the Ministry of Public Enterprises removes a uniform oversight mechanism that had been effective in enhancing governance and compliance across commercial SOEs.
“We had a system where the Ministry of Public Enterprises was the line minister for all commercial public enterprises. That ministry has been done away with, and now it appears that reporting lines go to direct line ministers,” Samuehl said.
He stressed the importance of maintaining the governance momentum built under PEGA, warning against the erosion of standards due to fragmented oversight.
“There has been deliberate effort made to encourage governance and compliance. That momentum should be kept, regardless of whether SOEs now resort under their line ministry,” he said.
Under the new arrangement, line ministers are now solely responsible for the appointment of SOE boards—a function previously carried out in consultation with the shareholder ministry. Samuehl called for ministers to appoint competent and experienced board members capable of delivering value and accountability.
“It is really up to the line minister to exercise his or her own responsibility in appointing boards,” he said. “Our appeal all along to the shareholder is to appoint competent, tested, tried board members who bring value to state-owned enterprises.”
Rewarding performance,
not failure
Samuehl also responded to growing public criticism over high executive salaries and board fees within non-performing SOEs. He maintained that there should be clear consequences for underperformance.
“All over the world, good performance is rewarded. And poor performance—of course, there should be consequences,” he said.
While he acknowledged that not all missed targets stem from management shortcomings, he emphasised that public enterprises must still be held accountable.
“I see no reason why you have to reward non-performance,” Samuehl said.
He also warned that without meaningful incentives, SOEs risk losing skilled staff to the private sector.
“If officials see that there are no incentives in public enterprises, they end up going to the private sector. We do compete with the private sector,” Samuehl added.
Balancing Public Mandates and Financial SustainabilitySamuehl concluded by highlighting the government’s broader role in shaping an economic environment that supports both private sector development and improved public services.
“The role of the government is to create an enabling environment—for private sector growth, for economic development, and for improved living conditions,” he said.
As ministries take full control of the entities under their portfolios, questions remain as to whether the reforms will lead to greater efficiency—or expose SOEs to political interference and diluted governance. All eyes are now on the amendment of PEGA and the performance of ministries in their new shareholder roles.
The recent dismantling of Namibia’s Ministry of Public Enterprises has cast a shadow of uncertainty over the future of governance, compliance, and performance management across state-owned enterprises (SOEs).
President Netumbo Nandi-Ndaitwah’s administration dissolved the Public Enterprises Ministry previously responsible for acting as the central shareholder of commercial state-owned enterprises in March, transferring its functions to individual line ministries in a significant shift to Namibia’s SOE oversight structure.
Despite this change, the legal foundation regulating public enterprises remains intact. The Public Enterprises Governance Act (PEGA) of 2019, which introduced governance and performance frameworks for SOEs, is still in force.
“Yes, PEGA is still relevant and in force until an amendment law is enacted,” finance ministry spokesperson Wilson Shikoto confirmed.
He added that Cabinet has already directed that PEGA be reviewed and amended to reflect the new governance structure.
While line ministries now oversee administrative responsibilities, Shikoto noted that overall governance continues to be managed by the Department of Public Enterprises within the Ministry of Finance.
Industry leaders raise concerns
Chairperson of the Public Enterprise CEOs Forum, Fluksman Samuehl, has voiced concern over the implications of the new decentralised model.
Speaking on NTV’s Business 7, Samuehl said the removal of the Ministry of Public Enterprises removes a uniform oversight mechanism that had been effective in enhancing governance and compliance across commercial SOEs.
“We had a system where the Ministry of Public Enterprises was the line minister for all commercial public enterprises. That ministry has been done away with, and now it appears that reporting lines go to direct line ministers,” Samuehl said.
He stressed the importance of maintaining the governance momentum built under PEGA, warning against the erosion of standards due to fragmented oversight.
“There has been deliberate effort made to encourage governance and compliance. That momentum should be kept, regardless of whether SOEs now resort under their line ministry,” he said.
Under the new arrangement, line ministers are now solely responsible for the appointment of SOE boards—a function previously carried out in consultation with the shareholder ministry. Samuehl called for ministers to appoint competent and experienced board members capable of delivering value and accountability.
“It is really up to the line minister to exercise his or her own responsibility in appointing boards,” he said. “Our appeal all along to the shareholder is to appoint competent, tested, tried board members who bring value to state-owned enterprises.”
Rewarding performance,
not failure
Samuehl also responded to growing public criticism over high executive salaries and board fees within non-performing SOEs. He maintained that there should be clear consequences for underperformance.
“All over the world, good performance is rewarded. And poor performance—of course, there should be consequences,” he said.
While he acknowledged that not all missed targets stem from management shortcomings, he emphasised that public enterprises must still be held accountable.
“I see no reason why you have to reward non-performance,” Samuehl said.
He also warned that without meaningful incentives, SOEs risk losing skilled staff to the private sector.
“If officials see that there are no incentives in public enterprises, they end up going to the private sector. We do compete with the private sector,” Samuehl added.
Balancing Public Mandates and Financial SustainabilitySamuehl concluded by highlighting the government’s broader role in shaping an economic environment that supports both private sector development and improved public services.
“The role of the government is to create an enabling environment—for private sector growth, for economic development, and for improved living conditions,” he said.
As ministries take full control of the entities under their portfolios, questions remain as to whether the reforms will lead to greater efficiency—or expose SOEs to political interference and diluted governance. All eyes are now on the amendment of PEGA and the performance of ministries in their new shareholder roles.
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