EDITORIAL: Don’t back-pedal on SOE reforms
News last week that the public enterprises ministry will be converted into a directorate within the ministry of finance is to be taken with a pinch of salt.
With a full ministry dedicated to public enterprises, the Geingob administration had underlined its intent and vision for a crumbling state-owned enterprise (SOE) sector – and there was excitement to this end.
But six years into what has been a tumultuous journey, the president has pulled the plug. While the nuts and bolts of converting the public enterprises into a directorate are yet to be revealed, the idea itself seems wrong.
Symbolically, having a dedicated ministry – with directorates and sub-divisions all dedicated to reforming SOEs – meant there was deliberate effort to achieve these results. Now such ambitions are confined to a directorate of a ministry whose broader mandate is completely different.
Given how much SOEs are leeching from national coffers annually, reforming this sector should be top of the government agenda. In the 2017/2018 financial year, for example, government allocated more than N$12 billion in guarantees and bailouts to SOEs.
This astronomical amount points to why it is urgent for SOEs to go under the knife and have their inefficiencies stitched up for the sake of our economy. It is hard to see how a task as gargantuan as this will be achieved by a mere directorate.
With a full ministry dedicated to public enterprises, the Geingob administration had underlined its intent and vision for a crumbling state-owned enterprise (SOE) sector – and there was excitement to this end.
But six years into what has been a tumultuous journey, the president has pulled the plug. While the nuts and bolts of converting the public enterprises into a directorate are yet to be revealed, the idea itself seems wrong.
Symbolically, having a dedicated ministry – with directorates and sub-divisions all dedicated to reforming SOEs – meant there was deliberate effort to achieve these results. Now such ambitions are confined to a directorate of a ministry whose broader mandate is completely different.
Given how much SOEs are leeching from national coffers annually, reforming this sector should be top of the government agenda. In the 2017/2018 financial year, for example, government allocated more than N$12 billion in guarantees and bailouts to SOEs.
This astronomical amount points to why it is urgent for SOEs to go under the knife and have their inefficiencies stitched up for the sake of our economy. It is hard to see how a task as gargantuan as this will be achieved by a mere directorate.
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