Jooste tables Public Enterprises Governance Bill

11 Oct 2018 10:30am
WINDHOEK, 11 OCT (NAMPA) – Minister of Public Enterprises, Leon Jooste on Wednesday tabled the draft Public Enterprises Governance Bill 2018, which if enacted will make provision for the efficient governance of parastatals and provide for powers of the minister.
The Bill will also make provision for the restructuring of parastatals, monitoring of their performance and incidental matters.
Motivating the draft legislation in the National Assembly, Jooste said the Bill is necessitated by the failure of the dual governance model, which came with the promulgation of the State-Owned Enterprises Governance Act of 2006.
“Ten years after the dual governance model was implemented, it became apparent that this model does not provide the optimal governance model,” he said.
It was against this backdrop that President Hage Geingob felt the need to create a fully-fledged public enterprises ministry to “position Namibia’s key public enterprises to play their meaningful role in the country’s development agenda and ensure that public enterprises are well managed to reduce the financial burden on the State”.
Jooste said this mandate will be executed by adopting the more centralised hybrid governance model, which has already been approved by Cabinet.
To remedy the ailing governance of parastatals, the proposed Bill makes several recommendations.
The recommendations are outlined in Section 1 of the Bill, which deals with amendments and/or additions to definitions.
The definitions of commercial public enterprise, non-commercial public enterprise, and extra budgetary funds were added to distinguish between the different categories of public enterprises under the hybrid governance model.
In essence, a commercial public enterprise is a State-owned company which is expected to generate sustainable profits and pay dividends to the State.
A non-commercial public enterprise on the other hand is not expected to generate sustainable profits or pay dividends to the State.
An extra budgetary fund’s only source of revenue comes from the government via budgetary allocations or tax related levies.
Jooste indicated that they spent countless hours analysing the core reasons behind the failure of most commercial public enterprises and found that most of these failures could be attributed to the highly flawed dual-governance model.
“This is not a Namibian failure as such, but rather a common global scenario, which is why many countries have migrated to a more centralised governance/ownership model,” he explained.
The minister said the hybrid governance model will provide him with the optimum institutional and organisational infrastructure to reform public enterprises without escalating costs.
“The model will allow the ministry to become more focused and specialised with an appropriate structure and skill to be a professional active shareholder representative for the State,” he said.
If enacted, the Bill will among other things limit the number of appointments on boards of parastatals and board members will have to sign individual performance agreements.