Decentralised SOE Oversight Sparks Governance Concerns

The recent decentralisation of oversight over Namibia’s state-owned enterprises (SOEs) has stirred uncertainty over the future of governance, compliance, and performance standards within these entities.

Under the administration of President Netumbo Nandi-Ndaitwah, the Ministry of Public Enterprises was dissolved in March this year, effectively ending its role as the shareholder ministry for commercial SOEs. These entities now report directly to their respective line ministries.

Legal Framework Still in Place

Despite the shift in reporting lines, the legal framework under which SOEs operate remains unchanged.

“Yes, PEGA is still relevant and in force until amendment law is enacted,” Ministry of Finance spokesperson Wilson Shikoto confirmed, referring to the Public Enterprises Governance Act (PEGA) of 2019. He added that the Cabinet has already instructed for the Act to be amended to reflect the President’s directive.

According to Shikoto, governance oversight is still handled by the Department of Public Enterprises under the Ministry of Finance, while line ministries are now responsible for administrative functions.

Forum Chair Warns Against Losing Oversight Standards

Speaking on NTV’s Business 7 show, Chairperson of Public Enterprise CEOs Forum, Fluksman Samuel, has expressed concern over the implications of the new model.

“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,” Samuel said.

He emphasised that while it may be too early to fully assess the impact of the change, the governance momentum established under PEGA must not be lost.

“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.”

Accountability Now Rests With Line Ministers

Samuel pointed out that line ministers now hold direct responsibility for board appointments—previously handled in consultation with the shareholder ministry.

“It is really up to the line minister to exercise his or her own responsibility in appointing boards,” he said.

He called for the appointment of capable and experienced board members who can add value and ensure that entities meet their mandates.

“Our appeal all along to the shareholder is to appoint competent, tested, tried board members who bring value to state-owned enterprises.”

Performance Must Be Measured and Rewarded

Samuel also addressed growing public scrutiny over high salaries and board fees in underperforming SOEs. He was clear: poor performance should not be rewarded.

“All over the world, good performance is rewarded. And poor performance—of course, there should be consequences,” he said.

He acknowledged that in some cases, missed targets may be due to external market factors beyond management’s control. However, he insisted that accountability remains essential.

“I see no reason why you have to reward non-performance.”

He further cautioned that unattractive working conditions in public enterprises risk driving skilled professionals to the private sector.

“If officials see that there are no incentives in public enterprises, they end up going to the private sector,” he said. “We do compete with the private sector.”

Samuel underscored the importance of striking a balance between financial sustainability and public affordability, especially in sectors where state intervention can support broader economic activity.

“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.