Time for uncomfortable truths: Reforming Namibia's failing SOEs

It is time for an uncomfortable conversation and honest reflection. The emergence of multiple scandals in Namibia, particularly those involving State-Owned Enterprises (SOEs) across critical economic sectors, is both upsetting and deeply concerning. Whilst this piece will not identify specific entities embroiled in corruption and mismanagement scandals, it is clear that these failures have threatened our citizens' livelihoods and compromised essential service delivery.President Netumbo Nandi-Ndaitwah declared in her inaugural speech that corruption constitutes treason and should be treated accordingly. Such statements emerge with each new administration's commitment to improving transparency and trust in state institutions, promising that corruption will be avoided and exposed at all costs. However, we must acknowledge a fundamental truth: Namibia is not a poor country. Rather, certain State-Owned Enterprises and elites have perpetuated poverty by failing to fulfil their mandates and embezzling government funds.The Root of the ProblemMany government-run companies operate under capitalist principles, yet fail to deliver basic services that would allow the Namibian economy to function properly. The disastrous consequences of inequality and incompetence at state-owned enterprises responsible for financial investment and development are evident. Whilst these entities often blame their predicament on strategic, financial, and operational concerns, they share a common thread: the absence of basic ethical oversight and governance.These SOEs have failed due to poor governance, wasteful spending, employee intimidation, procurement fraud, staff and leadership incompetence, and an inability to deliver on their fundamental mandates. Their governance failings are inextricably linked to—if not directly causing—their operational, strategic, and financial problems.A Path Forward: Reform or ClosureWe can no longer discuss reforming SOEs when evidence suggests they should be closed or restructured, particularly when they continue to damage the economy. Careful consideration should be given to preserving those enterprises that are essential and effectively support development whilst providing necessary services.A more sustainable strategy involves concentrating on closing and reforming failed SOEs, thereby improving governance and increasing accountability. Taxpayers would benefit more from integrating these institutions into line ministries rather than maintaining them on life support. Continued funding without an effective strategy will only exacerbate existing problems.Governance and AccountabilityImproving governance requires ensuring that appointments to SOE boards are made professionally and transparently, enabling proper oversight. Line ministries must avoid re-appointing individuals who have performed poorly in previous positions to boards of directors. Whilst Namibia possesses skills and talents, many remain unutilised or inadequately evaluated.Following recommendations from the late President Hage Geingob's high-level committee on Namibia's economy, the government should close financially troubled public companies plagued by poor oversight, corruption, and unstable management. The lack of mutual understanding regarding values, purpose, and adherence to good governance principles has resulted in significant financial losses.The Cost of CorruptionLeadership in some SOEs exploit loopholes to evade punishment, despite board members possessing the knowledge, abilities, and experience necessary for their roles. This deliberate ignorance of sound corporate governance demonstrates that board members understand their fiduciary duties yet choose to act against Namibia's best interests, exhibiting a lack of accountability, transparency, and consequence management.Executive Management Teams of most SOEs are inadequate for their tasks, whilst boards ignore their fiduciary responsibilities despite clear mandates under the State Owned Enterprises Act, 2006. The potential for government bailouts creates an environment where boards fail to execute their duties properly.Recommendations for ReformPoor governance breeds corruption, harming the economy, citizens dependent on SOE services, and the enterprises themselves. The consequences include financial and reputational losses, redundancies, business disruption, and sanctions. For the economy, corruption can deter foreign investment, undermine investor confidence, and create unsustainable debt.To remain relevant and execute their crucial supporting role in the Namibian economy, SOEs must adapt their operations. This requires:Enhanced and legitimate leadership commitment to good governanceIncreased ethical awareness among employees at all levelsTreating employees with respect, fairness, and dignityHolding employees accountable for their actionsConclusionThe practice of appointing SOE board members for appearances rather than genuine expertise or independence undermines effective governance and creates numerous problems including poor performance, corruption, and lack of accountability.To enhance SOE performance and restore public trust, the government must strengthen board nomination criteria, promote merit-based appointments, and ensure genuine autonomy and oversight. Only through such comprehensive reform can Namibia's State-Owned Enterprises fulfil their intended purpose of serving the nation's economic development and citizens' welfare.The time for uncomfortable truths has arrived. Namibia's citizens deserve better, and our SOEs must either deliver on their mandates or make way for institutions that will.

Time for uncomfortable truths: Reforming Namibia's failing SOEs

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Namibian Sun 2025-09-16

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Time for uncomfortable truths: Reforming Namibia's failing SOEs

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Namibian Sun 2025-09-16

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