21 Jul 2016 17:50pm
WINDHOEK, 21 JUL (NAMPA) All commercial public enterprises will henceforth be wholly accountable to the Ministry of Public Enterprises in terms of financial operation and performance.
Minister of Public Enterprises Leon Jooste announced on Thursday that his ministry will from now on execute the full shareholder rights under the newly approved Hybrid Governance Model.
Cabinet on Tuesday approved the Hybrid Governance Model aimed at reforming public institutions to replace the current dual-governance model, which has failed.
Namibia has 18 commercial public enterprises, which include Air Namibia, NamPower, Namibia Ports Authority (Namport) and TransNamib.
Briefing the media on Thursday, Jooste explained that key oversight functions as per the Public Enterprise Act 2015 include the appointment of the boards of directors; enforcement of good corporate governance through Governance and Performance Agreements; critical reviews of business and final plans; the approval of annual budgets; issuance of remuneration directives for boards and management; commission of special investigations when necessary; and guidance and approvals during restructuring of public enterprises.
Jooste indicated that performance management will become an integral part of the public enterprises Governance and Performance Agreement with an incentivised remuneration system and a performance management system will be implemented to optimise accountability and transparency.
He further noted that portfolio ministries retain full control of industrial/sectoral policy formulation, formulation of sector legislation and the regulation of the sector.
Jooste said the new model is addressing an imbalance of control of the sectors in which the public enterprises operate, by having legislation of a sector and the control over the public enterprises be done by two separate entities: the portfolio ministry and the public enterprise ministry respectively.
The model addresses a current unfavourable structure where line ministries controlled policy and legislative formulation, regulation and implementation, creating a potential indirect conflict of interest.
The Hybrid Governance Model distinguishes between three primary categories of public enterprises, namely commercial public enterprises; non-commercial public enterprises and financial institutions; and extra-budgetary funds.
Under the former dual-governance model, the responsibilities of monitoring and governing of public enterprises were shared between the portfolio or shareholder ministries and the State-owned Enterprises Council chaired by the prime minister.
In the hybrid model, the administration and supervision of the various groups of non-commercial public enterprises will be the responsibility of the respective portfolio ministries.
Namibia has 72 public enterprises.