Public enterprise portfolio negative: Jooste

26 Apr 2018 06:30am
WINDHOEK, 26 APR (NAMPA) – The Ministry of Public Enterprises has recorded an unsatisfactory public enterprise portfolio on the total return of its assets, with a loss of more than N.dollars 150 million per annum.
This, according to Minister Leon Jooste in his budget motivation speech in the National Assembly on Tuesday, indicates that current levels of performance and financial results emanating from costs of the public enterprises are low and unsustainable.
“For 2017/18 alone, commercial public enterprises that are supposed to generate their own revenue, received a total allocation from the national budget of more than N.dollars 1.2 billion, whilst the total debt is already about N.dollars 43 billion – 25 per cent of the Gross Domestic Product,” Jooste outlined.
The minister described this situation as unsustainable and warranting critical intervention by the government.
Created in 2015 by President Hage Geingob, the functions of the ministry include establishing generally accepted common principles of corporate governance and good practice governing State-owned Enterprises, among others.
According to Jooste, although the ministry was created to perform such functions, he feels that since independence, many public enterprises (PEs) have failed to deliver on the mandate they were created for.
“For example, instead of PEs supporting the generation of revenue for the State, they have become a burden to the State by depending on annual government subsidies and guarantees to sustain their operations.”
The minister therefore hopes a legal framework will be transformed from the newly developed Hybrid Governance Model, which was approved by Cabinet in 2016.
This framework, once approved by government, will enable all commercial PEs to remain with their line ministries.
“This governance model supported by the improved legislative environment, will enable us to pursue a well-crafted process to transform our PEs,” said Jooste.