Some SOEs fail to deliver to country's economy: Ithete

16 Dec 2015 16:40pm
WINDHOEK, 16 DEC (NAMPA) – Some State-owned enterprises (SOEs) have failed to deliver on their mandates to make positive contributions towards the country's economy.
The Deputy Minister of Finance, Natangue Ithete said this during the handover of dividends worth N.dollars 2 million from the Namibia National Reinsurance Corporation (NamibRe) to the government through the Ministry of Finance here on Monday.
He said a great number of SOEs in Namibia do not submit financial statements and accountability reports to line ministries as requested by law.
“The general management of SOEs leaves much to be desired with allegations of misuse of allocated funds due to corruption and nepotism claims surrounding a lot of SOEs and their senior officials and boards,” said Ithete.
He noted that SOE executives are also known for globetrotting and huge bonuses, while the State has to incur significant borrowing costs to acquire funding and channel it to them.
The deputy minister also said Government anticipates to see improvements but SOEs problems always go beyond bailouts and strategy formulation. Institutions mostly operate in hostile environments that prohibit them to respond quickly to market demands.
In addition, he said a lot of companies fail to hold annual general meetings (AGMs), and although some of the institutions hold their AGMs their shareholders and partners fail to prepare in advance to make sound contributions.
Ithete further charged that usually all blame is put on chief executive officers (CEOs) of organisations while they are just part of the value chain with a lot of players included, adding that generally CEOs are blamed with the global perspective that CEOs have all the powers.
“We need to move away from the 19th century style and appoint CEOs who are qualified and exposed and give them all necessary decision-making powers to run SOEs properly,” he charged.
Ithete further said more scrutiny into the appointment of CEOs and Boards is needed, noting that just because a person has been a general manager or senior manager does not qualify them to become CEO or be part of the board.
He added that at board level a focus should be placed on company's strategic objectives, giving an example of fast-moving industries like finance, tourism, telecommunication, energy and mining.
“We need to appoint CEOs who are patriotic to the mandate of the institution and those having the skills as well as the powers to manage these companies,” said the deputy.
The Namibian government in 1998 created a local reinsurance business (NamibRe) in the country as part of its efforts to develop local capital markets. This was to curb the outflow of domestic capital abroad.