JOSEF KEFAS SHEEHAMA
It’s time to have an uncomfortable conversation and be honest with each other. It is upsetting and sad to watch Namibia’s multiple scandals emerge, particularly those involving State-Owned Enterprises (SOEs) in an array of critical economic sectors. This piece will not pinpoint specific entities involved in corruption and mismanagement scandals that have threatened our citizens’ livelihoods and service delivery.
President Netumbo Nandi-Ndaitwah stated during her inaugural speech that corruption is treason and should be treated as such. As a result, corruption emerges as soon as new administrations take office as part of their commitment to improving transparency and trust in state institutions, with the promise that all forms of corruption should be avoided and exposed at all costs. It is fundamental to acknowledge that Namibia is not a poor country, but rather that certain State-Owned Enterprises (SOEs) and elites have perpetuated poverty by failing to perform their mandates and embezzling government funds. Some of these government-run companies operate under a capitalist system.
We can no longer allow all of this to happen in our country because all citizens must enjoy Namibia’s resources. The State-Owned Enterprises (SOEs), which are responsible for ensuring that vital services are provided to allow the Namibian economy to run properly, are failing. One does not have to look far to discover the disastrous consequences of inequality and incompetence at state-owned enterprises in charge of financial investment and development. Many of these entities blame their current situation on strategic, financial, and operational concerns. However, one thing that all of these institutions have in common is a lack of basic ethics oversight and governance. These SOEs have failed, typically due to poor governance, wasteful spending, employee intimidation, procurement fraud, staff and leadership incompetence, and an inability to deliver on the fundamental mandates for which they were originally established.
Furthermore, it is reasonable to argue that these enterprises’ governance failings are closely tied to, if not directly caused by, their operational, strategic, and financial problems. We can no longer discuss reforming SOEs while there is evidence that they should be shut down or restructured, particularly if they are still hurting the economy. However, careful thought should be given to preserving those that are essential and effectively support development and provide necessary services. A more sustainable strategy is to concentrate on closing and reforming SOEs, which will improve governance and increase accountability among those involved. Therefore, I believe that taxpayers would be better off integrating these institutions into line ministries rather than keeping them on life support, as continuing to provide funding without an effective strategy will just make matters worse. Consequently, it is crucial to identify areas for improving governance, as ensuring that appointments to SOE boards are made with professionalism and adherence to these principles would foster transparency and enable proper oversight.
It is crucial that line ministries avoid re-appointing individuals, especially those who have done poorly in prior positions, to the board of directors of State-Owned Enterprises. While I don’t think Namibia lacks skills and talents, it’s likely that some aren’t utilized or evaluated. As per the recommendations of the late His Excellency Dr. Hage G. Geingob’s high-level committee on Namibia’s economy, the government should shut down financially troubled public companies due to poor oversight, corruption, and unstable management. It is evident that there is a lack of mutual understanding and agreement regarding values, purpose, and adherence to good governance principles. As a result, we are witnessing financial losses for SOES’s enterprises, and it is very upsetting to witness the leadership of some SOEs exploiting loopholes to evade punishment.
It is evident that the board members purposefully ignore sound corporate governance even though they possess the knowledge, abilities, and experience necessary to serve on these SOE boards. It is proof that the board members are aware of their fiduciary duties, yet they intend to act against Namibia’s best interests and exhibit a lack of accountability, transparency, and consequence management. The board members are accountable for enforcing good governance and enforcing a zero tolerance policy against corruption and other corrupt practices. Poor or mediocre performance is likely to persist until they make the time to achieve this. It is the right of ministers to outline the performance standards that they want.
Moreover, it is obvious that some Executive Management Teams of most SOEs are not up to the task, boards are ignoring their fiduciary responsibilities, despite a clear and extensive mandate and responsibilities under the State Owned Enterprises Act, 2006 (Act No.2 of 2006). It is well acknowledged that boards of State-Owned Enterprises (SOEs) frequently face lackluster accountability for failing to comply with their fiduciary responsibilities. This lack of accountability can be attributed to imprecise monitoring mechanisms.
The potential of government bailouts can create an environment in which boards fail to properly executing their fiduciary duties. The Public Enterprises Act compels directors to engage into performance agreements as soon as they are appointed. Glancing at a few of these inscribes reveals that some members serve on two or three boards at the same time. A further finding is that certain board members are recycled from one board to the next. The first step in improving the performance of underperforming SOEs is to determine board members and management teams based on their qualifications, knowledge, and experience.
Poor governance can lead to corruption, which can harm the economy, the people who depend on the SOE for essential services, and the SOE itself. Financial and reputational losses, job cuts, business interruption, and punishments are the repercussions for SOEs. Corruption can hinder foreign investment, undermine investor confidence, and result in unmanageable debt for the economy. To remain relevant and execute their crucial supporting role in the proper functioning of the Namibian economy, SOEs must adapt the way they operate and carry out their mandates. SOEs can contribute to achieve this goal by assuring enhanced and legitimate leadership commitment to good governance, increasing ethical awareness among employees at all levels, treating employees with respect, fairness, and decency, and holding employees accountable for their actions.
In conclusion, the practice of window dressing SOE board members, in which persons are appointed for appearances rather than true knowledge or independence, undermines effective good governance and can result in an array of concerns such as poor performance, corruption, and a lack of accountability.
To enhance SOE performance and public trust, the government must strengthen board nomination criteria, promote merit-based decisions and ensure true autonomy and oversight.
