'SOE reforms are nasty'
The minister of public enterprises, Leon Jooste, says it will require a lot of political will to turn around embattled state-owned enterprises.
He was speaking at an event organised by the Economics Association of Namibia on Tuesday.
Some of the reforms required would not be without resistance, Jooste said, but it had to be done in the interest of the country at the end of the day.
“We need a large amount of political backing. SOE reforms are nasty and there will always be casualties and [these] casualties will always involve people,” he said.
According to Jooste, there is no easy way around the government's planned reform to revive ailing SOEs.
“If we are not willing to make tough decisions, we will remain challenged,” he said.
Referring to similar reforms in Singapore and Malaysia, he said the involvement of the heads of state had contributed significantly to turning the tide.
Rand Merchant Bank Namibia independent director Steve Galloway said the private sector was willing to help the government in its quest to revive ailing SOEs and to fund expensive projects.
Galloway was of the opinion that this would improve the government's debt-to-GDP profile.
“We [private sector] figured that we can take the burden of government in about three years. Development finance institutions and the private sector can take the load of government. That would make the debt profile palatable,” Galloway said at the briefing.
Jooste also acknowledged that the government had not always been a good shareholder.
“We've not managed to be a professional shareholder for our public enterprises. That's why our president created this ministry and that is our focus,” he said.
“It is the shareholder that appoints the board… the shareholder who approves the turnaround strategies… the shareholder who must ensure that there is accountability, transparency (and that) corporate governance principles are adhered to.”
Jooste said the government's failure resulted in an “SOE culture”.
“The SOE culture is typically what you would see from many of the commercial entities. The bailout culture,” he said.
To address these shortcomings, Jooste said his ministry started to challenge SOEs' unfeasible business plans. “In the past, business plans were approved without being evaluated by a professional body, so they were doomed to from the beginning,” he said.
-additional reporting by Nampa
OGONE TLHAGE
He was speaking at an event organised by the Economics Association of Namibia on Tuesday.
Some of the reforms required would not be without resistance, Jooste said, but it had to be done in the interest of the country at the end of the day.
“We need a large amount of political backing. SOE reforms are nasty and there will always be casualties and [these] casualties will always involve people,” he said.
According to Jooste, there is no easy way around the government's planned reform to revive ailing SOEs.
“If we are not willing to make tough decisions, we will remain challenged,” he said.
Referring to similar reforms in Singapore and Malaysia, he said the involvement of the heads of state had contributed significantly to turning the tide.
Rand Merchant Bank Namibia independent director Steve Galloway said the private sector was willing to help the government in its quest to revive ailing SOEs and to fund expensive projects.
Galloway was of the opinion that this would improve the government's debt-to-GDP profile.
“We [private sector] figured that we can take the burden of government in about three years. Development finance institutions and the private sector can take the load of government. That would make the debt profile palatable,” Galloway said at the briefing.
Jooste also acknowledged that the government had not always been a good shareholder.
“We've not managed to be a professional shareholder for our public enterprises. That's why our president created this ministry and that is our focus,” he said.
“It is the shareholder that appoints the board… the shareholder who approves the turnaround strategies… the shareholder who must ensure that there is accountability, transparency (and that) corporate governance principles are adhered to.”
Jooste said the government's failure resulted in an “SOE culture”.
“The SOE culture is typically what you would see from many of the commercial entities. The bailout culture,” he said.
To address these shortcomings, Jooste said his ministry started to challenge SOEs' unfeasible business plans. “In the past, business plans were approved without being evaluated by a professional body, so they were doomed to from the beginning,” he said.
-additional reporting by Nampa
OGONE TLHAGE
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