SOE CEOs should not be paid more than president – Sankwasa
Nikanor NangoloWINDHOEK
Urban and rural development minister Sankwasa James Sankwasa has criticised the hefty salaries of some chief executive officers at Namibian state-owned enterprises (SOEs), saying many earn more than the president despite shouldering far fewer responsibilities.
He warned that the disparity “requires attention”.
Speaking on The Evening Review on Wednesday, Sankwasa said it is inconceivable that some SOE CEOs, including those reliant on government bailouts, are taking home larger pay packets than the head of state, who is responsible for running an entire country.
“We have chief executive officers in this country that are paid higher than the president, who has more functions to execute and more responsibilities than a single-entity chief executive officer,” he said.
President Netumbo Nandi-Ndaitwah earns an untaxed annual salary of N$1.7 million – around N$146 000 per month – guaranteed for life. By comparison, former Namcor finance executive Jennifer Hamukwaya received N$1.6 million as a nine-month settlement when her contract was not renewed. She previously earned N$180 000 per month, or N$2.1 million a year.
The Namcor managing director’s current package is about N$230 000 per month, or N$2.7 million annually. In 2022, the CEO of mobile network giant MTC – majority owned by government – earned N$2.7 million per year.
In 2016, NamPower managing director Simson Haulofu reportedly earned N$3.4 million.
Eight years ago, in 2017, the Telecom Namibia CEO earned N$1.8 million annually. That figure is expected to have surpassed N$2 million by now.
The City of Windhoek CEO reportedly earns around N$3.3 million annually – just under N$300 000 per month.
Sankwasa said such pay scales ultimately harm the public.
“Residents are failing to pay municipalities because of the rates being determined by municipalities. People are paying high rates to cover executives’ salaries, which has nothing to do with the services being provided,” he added.
Weighing up the scales
Political analyst Ndumba Kamwanyah told Namibian Sun that lucrative executive salaries might be justified if an SOE is high-performing and efficient, delivering real value to the country.
“Running a large state-owned enterprise can be just as complex as leading a private company. Some SOEs manage billions in assets, deal with national infrastructure and serve millions of people,” he said.
“To attract someone with the skills and experience to handle that pressure, the government may need to offer competitive salaries, otherwise, talented professionals may go elsewhere.”
He added that while the president’s role is broad and political, CEOs are hired based on qualifications, experience and performance benchmarks.
Political analyst Rui Tyitende, however, argued that a pay comparison between the presidency and CEO roles is flawed.
“Being president of the country requires no formal qualifications, skills set or experience. A Grade 10 dropout or a complete idiot can be elected president, as we have no standards when it comes to politicians in Namibia,” he said.
“CEOs are appointed to enhance the financial and operational performance of their entities, which requires specific qualifications and leadership skills,” he noted.
“However, only a handful of CEOs in Namibia deserve the astronomical salaries they earn, as most SOEs are in financial distress and plagued by incompetence and corruption.”
Rules ignored
Government approved new salary regulations for SOE executives in 2018, allowing top-tier CEOs to earn over N$2 million annually, excluding bonuses. The structure, announced by then-public enterprises minister Leon Jooste, replaced 2013 rules introduced when the late Hage Geingob was prime minister.
Parastatals are ranked into three tiers based on size, income, workforce, market share, skills and assets. Tier 3 CEOs can earn between N$964 000 and N$2 million per year, Tier 2 up to N$1.3 million, and Tier 1 between N$545 000 and N$1 million. However, these caps have often been ignored.
Jooste has repeatedly warned that the SOE wage bill – N$6.1 billion – is unsustainable given poor performance levels. He noted that SOEs, meant to deliver public services, generate revenue and drive economic growth, have largely failed to do so. Instead, many survive on annual state subsidies and guarantees.
In 2017/18, they received more than N$4 billion from the national budget, while their total debt stood at N$43 billion – 25% of GDP.
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Urban and rural development minister Sankwasa James Sankwasa has criticised the hefty salaries of some chief executive officers at Namibian state-owned enterprises (SOEs), saying many earn more than the president despite shouldering far fewer responsibilities.
He warned that the disparity “requires attention”.
Speaking on The Evening Review on Wednesday, Sankwasa said it is inconceivable that some SOE CEOs, including those reliant on government bailouts, are taking home larger pay packets than the head of state, who is responsible for running an entire country.
“We have chief executive officers in this country that are paid higher than the president, who has more functions to execute and more responsibilities than a single-entity chief executive officer,” he said.
President Netumbo Nandi-Ndaitwah earns an untaxed annual salary of N$1.7 million – around N$146 000 per month – guaranteed for life. By comparison, former Namcor finance executive Jennifer Hamukwaya received N$1.6 million as a nine-month settlement when her contract was not renewed. She previously earned N$180 000 per month, or N$2.1 million a year.
The Namcor managing director’s current package is about N$230 000 per month, or N$2.7 million annually. In 2022, the CEO of mobile network giant MTC – majority owned by government – earned N$2.7 million per year.
In 2016, NamPower managing director Simson Haulofu reportedly earned N$3.4 million.
Eight years ago, in 2017, the Telecom Namibia CEO earned N$1.8 million annually. That figure is expected to have surpassed N$2 million by now.
The City of Windhoek CEO reportedly earns around N$3.3 million annually – just under N$300 000 per month.
Sankwasa said such pay scales ultimately harm the public.
“Residents are failing to pay municipalities because of the rates being determined by municipalities. People are paying high rates to cover executives’ salaries, which has nothing to do with the services being provided,” he added.
Weighing up the scales
Political analyst Ndumba Kamwanyah told Namibian Sun that lucrative executive salaries might be justified if an SOE is high-performing and efficient, delivering real value to the country.
“Running a large state-owned enterprise can be just as complex as leading a private company. Some SOEs manage billions in assets, deal with national infrastructure and serve millions of people,” he said.
“To attract someone with the skills and experience to handle that pressure, the government may need to offer competitive salaries, otherwise, talented professionals may go elsewhere.”
He added that while the president’s role is broad and political, CEOs are hired based on qualifications, experience and performance benchmarks.
Political analyst Rui Tyitende, however, argued that a pay comparison between the presidency and CEO roles is flawed.
“Being president of the country requires no formal qualifications, skills set or experience. A Grade 10 dropout or a complete idiot can be elected president, as we have no standards when it comes to politicians in Namibia,” he said.
“CEOs are appointed to enhance the financial and operational performance of their entities, which requires specific qualifications and leadership skills,” he noted.
“However, only a handful of CEOs in Namibia deserve the astronomical salaries they earn, as most SOEs are in financial distress and plagued by incompetence and corruption.”
Rules ignored
Government approved new salary regulations for SOE executives in 2018, allowing top-tier CEOs to earn over N$2 million annually, excluding bonuses. The structure, announced by then-public enterprises minister Leon Jooste, replaced 2013 rules introduced when the late Hage Geingob was prime minister.
Parastatals are ranked into three tiers based on size, income, workforce, market share, skills and assets. Tier 3 CEOs can earn between N$964 000 and N$2 million per year, Tier 2 up to N$1.3 million, and Tier 1 between N$545 000 and N$1 million. However, these caps have often been ignored.
Jooste has repeatedly warned that the SOE wage bill – N$6.1 billion – is unsustainable given poor performance levels. He noted that SOEs, meant to deliver public services, generate revenue and drive economic growth, have largely failed to do so. Instead, many survive on annual state subsidies and guarantees.
In 2017/18, they received more than N$4 billion from the national budget, while their total debt stood at N$43 billion – 25% of GDP.
[email protected]
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