PM cracks the whip on SOEs

17 June 2019 | Business

Prime Minister Saara Kuugongelwa-Amadhila says the state ownership of public enterprises should not be a justification for their perpetual dependency on national treasury.

She said even non-commercial state-owned enterprises (SOEs) are expected to strive for optimal management by promoting cost-efficiency and the optimal execution of their mandates. SOEs, though created to operate as independent, and in many instances on commercial principles, have become a huge financial burden on central government, which is perpetually called on to bail out these entities, often due to mismanagement. Kuugongelwa-Amadhila said while SOEs are sometimes capitalised by the state at inception, especially the commercial entities should strive to become self-sustaining and generate economic and financial returns for the shareholder and public.

“The current level of subsidies to public entities are unsustainable and crowd out other important programmes that can only be delivered under public service, while also posing a risk to national fiscal sustainability,” said Kuugongelwa-Amadhila. She said the high costs of services offered by SOEs also impose high costs on businesses and erode economic competitiveness and thus economic growth.



2% contributions

Addressing public enterprises minister Leon Jooste, SOE board members and executive managers on Friday, Kuugongelwa-Amadhila said SOEs should assist government's drought interventions “within their means”. She extended government's call for voluntary 2% salary contributions for one year by all income earners above a certain threshold to officials at SOEs.

“The proceeds will be ring-fenced to address funding for the drought. We have also extended the same appeal to the private sector and their employees,” she said.



Governance issues

Kuugongelwa-Amadhila said SOEs should embrace best international practices, adding that line ministers or Jooste are responsible for overseeing the observance of good governance through boards of the SOEs.

“Strong institutions are good for enhancing state formation, and public enterprises should take advantage of this to establish themselves concretely,” Kuugongelwa-Amadhila said.

She said SOEs must be accountable to the public, saying business and service motives remain at the core of these entities, which require financial prudence.

Kuugongelwa-Amadhila said it is unfortunate that SOEs are too often embroiled in governance fracases, usually due to a lack of cooperation between board members and executive management.

She also bemoaned the regular indefinite suspensions of SOE CEOs, which she said costs the state and public and detract from proper governance.



Performance

Kuugongelwa-Amadhila called on all SOEs to develop strategic plans that should clearly outline their contributions to national development goals, including the Harambee Prosperity Plan, the Fifth National Development Plan and Vision 2030.

She said it is regrettable that SOEs come into the spotlight for all the wrong reasons, either because they do not properly account or fail to provide affordable basic social services.

She said it is important not to suppress budgets for service delivery due to high administrative costs, especially personnel-related costs.

“While appreciating that remuneration is important to attract and retain skills, it is important that the remuneration tiers adopted for all public enterprises are adhered to. These remuneration tiers take into account the variable conditions of SOEs. Like in central government, where the personnel costs are high, there is also a need for the containment of remuneration costs in public enterprises,” she said.



Staff Reporter

Similar News

 

Media get lukewarm scorecard

8 hours ago | Business

A home-grown analysis of the Namibian media landscape has identified a number of issues that detract from quality journalism and trust in the media. Among...

Billions lost by Africa in illicit outflows

8 hours ago | Business

Illicit financial outflows have reduced Africa's tax revenues, undermined trade and investment opportunities, and deepened poverty on the continent. This was said by the president...

MUN inks deal with new bosses

8 hours ago | Business

The Mineworkers Union (MUN) says it has reached an agreement with the new Chinese owners of Rössing Uranium that there will be “no labour interruptions...

Making employees feel at home at Plastic Packaging

3 days ago - 19 July 2019 | Business

Jonell Malan Human resource management is essentially the management of human resources (HR). It is a function in organisations designed to maximise employee performance in...

Fascinated by consumers

3 days ago - 19 July 2019 | Business

Evany van Wyk Rozanne van der Merwe comes across as being the epitome of female empowerment and friendliness. And this is exactly who she is....

No dazzling half-year for Namdeb

3 days ago - 19 July 2019 | Business

Jo-Maré DuddyNamdeb Holdings recorded its worst first half-year since 2016, with diamond production for the six months ended 30 June plummeting by nearly 22% compared...

Resilient and strong

3 days ago - 19 July 2019 | Business

Mariselle StofbergWith her tenacious attitude, collaborative nature and desire to always learn and draw from other people’s knowledge and experience, Leorine Waggie is clearly on...

Continuously impacting lives

3 days ago - 19 July 2019 | Business

Ester Kamati Morné du Toit is a driven career man when it comes to his responsibilities as the acting vice-chancellor of the Namibia University of...

Company news in brief

3 days ago - 19 July 2019 | Business

Companies bid for Vedanta's Zambian assetsZambia expects nine companies to submit bids for Konkola Copper Mines (KCM) within weeks, mines minister Richard Musukwa said on...

SMEs plead for lower interest

3 days ago - 19 July 2019 | Business

SMEs and emerging entrepreneurs in Kavango East want the Development Bank of Namibian (DBN) to lower its lending interest rate, in order to facilitate more...

Latest News

Namibia gets more Welsh help

8 hours ago | Sports

JESSE JACKSON KAURAISA The Namibia Rugby Union (NRU) has acquired the services of Welsh Premiership boss Dale McIntosh to assist his counterpart Phil Davies with...

ACC probes Omuthiya

8 hours ago | Government

The Anti-Corruption Commission (ACC) is investigating alleged corrupt practices at the Omuthiya town council after some Swapo members laid complaints against their representatives.Swapo Party political...

Governor's advisor causes scandal in...

8 hours ago | Government

The governor for the Oshana Region, Elia Irimari, reportedly sent his special advisor, Michael Mwinga, home from an official visit to Angola for allegedly causing...

We have guaranteed poverty

8 hours ago | Opinion

More than 10 years ago there was concern over the growing numbers of orphans and vulnerable children in the country. During the time of Nangolo...

Shikongo calls for more support

8 hours ago | Sports

Debmarine Namibia chief executive Otto Shikongo has called on corporate private entities and parastatals to join the government in order to develop the youth in...

Big ups to Debmarine Namibia

8 hours ago | Sports

JESSE JACKSON KAURAISA I pen this with sincere gratitude towards Debmarine Namibia for sponsoring the financially struggling school sports fraternity.It...

Renewed plea for 2% donation

8 hours ago | Disasters

A public notice signed by cabinet secretary George Simataa, dated Thursday last week, makes a “humble appeal to all Namibians to donate up to 2%...

N$60k robbed from Ondangwa businesswoman...

8 hours ago | Crime

No arrest or recovery has been made in connection with a N$60 000 robbery at Ondangwa on Monday morning.The police in the Oshana Region reported...

Media get lukewarm scorecard

8 hours ago | Business

A home-grown analysis of the Namibian media landscape has identified a number of issues that detract from quality journalism and trust in the media. Among...

Load More