Shape up or ship out

It seems that it is going to be business unusual for state-owned enterprises, which will now be required to leverage some of their assets should they require additional funding, signalling the end of bailouts for Air Namibia, NBC, the Roads Contractor Company and TransNamib, to name but a few.This is according to the minister of public enterprises, Leon Jooste, who spoke to Namibian Sun about bailouts of SOEs and what these institutions will now be required to do should they seek additional funding. “We have to cope with all these allocations and the state-owned enterprises will have to leverage off assets for additional funding where required. We will also be working closely with the SOEs to address immediate inefficiencies to counter the dependence on treasury,” he said in response to a query.Jooste used TransNamib as an example of an SOE that could be the first to undergo a leveraging exercise. “TransNamib sits on a substantial balance sheet with a great deal of fixed assets which can create significant room to leverage.”Addressing a question by the Institute of Public Policy Research on the possibility of privatising SOEs or their assets, Jooste said in November 2016: “Our legislation has an entire section dealing with the restructuring of SOEs that clearly explains the process to be followed. We are going to explore various options to 'leverage' our comprehensive SOEs assets. We are also developing an ownership policy which will guide our decision-making and include this particular element. We are investigating options to merge certain SOEs, absorb some into ministries and to list some SOEs on the Namibian Stock Exchange, while others may attract strategic partners.” TransNamib board chairperson Paul Smit has also announced that the rail operator will be leveraging its properties as it seeks to raise additional funding for operations.PSG equity analyst Eloise du Plessis was of the opinion that government should reduce allocations to SOEs. “While efforts are being made to cut unnecessary and unproductive expenditure, we would like to see a greater focus on cutting more current expenditures rather than capital expenditures, which are needed for economic development. In this regard, the government should reduce its transfers to SOEs.”Usual suspects Air Namibia and TransNamib were allocated N$480 million and N$220 million in the new national budget, state broadcaster NBC N$179 million and the Roads Contractor Company N$21 million for operational expenses, while TransNamib's allocation is for rail rehabilitation and the resuscitation of the transport sector.All in all, N$4.6 billion will be allocated to 32 SOEs and several agricultural unions. The National Housing Enterprise has not been allocated any funding in the current financial year.OGONE TLHAGE

Shape up or ship out

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Namibian Sun 2026-03-27

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Shape up or ship out

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Namibian Sun 2026-03-27

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