Mother of all bailouts
The government has spent about N$6 billion of the taxpayer's money over the last ten years to keep Air Namibia afloat.
Close to N$9 billion has been transferred to Air Namibia, the Namibia Airports Company (NAC) and TransNamib over the past decade, estimates based on national budget documents show.
Air Namibia was the main recipient, with more than N$6 billion transferred to the company since 2008, a briefing paper on public enterprise governance issued by the Institute of Public Policy Research (IPPR) indicates.
For the current financial year, the national airline received N$486.4 million from treasury, while TransNamib was allocated N$220.3 million.
The NAC pocketed more than N$1.196 billion from direct government subsidies over the past ten years and TransNamib received just a little less, at N$1.181 billion.
The IPPR tabulated the figures by consulting national budgets to estimate the transfers to a selection of commercial public enterprises over the past ten years.
“Given the difficulty of finding accurate figures for all years, these figures should not be read as the final word – in some years, it is likely transfers were higher than indicated, while downward revisions have also occurred occasionally,” the IPPR warns.
The estimates only include direct subsidies.
In Namcor's case, where the table shows government transfers of N$510 million over a decade, the IPPR notes that Namcor's earnings from the fuel levy, which accounted for “substantial transfers from the taxpayer”, were not included in the table.
The IPPR's briefing paper was a second analysis of the reform of state-owned enterprises through the introduction of a hybrid governance model.
Under the section of commercial public enterprises, which under the new system are entities that are meant to provide a product or render a service in the best interest of the public, the IPPR analysis states that the new system does not explicitly require these entities to be profitable.
Nevertheless, the IPPR notes that the nature of these enterprises, including Air Namibia, TransNamib, Epangelo, Namcor and Namibia Wildlife Resorts, “implies that they should at the very least be somewhat efficient”.
“It is ironic, given the fact that many of them actually have substantial income streams, that commercial public enterprises have required such a disproportionate amount of government aid,” the IPPR paper adds.
Their dependence of many of these entities on state bailouts and other financial assistance was highlighted when the minister of public enterprises, Leon Jooste, recently “singled them [commercial public enterprises] out as having a particularly high failure rate.”
The IPPR summary includes transfers of close to N$82 million to Epangelo, N$290 million to Namibia Power Corporation and N$117 million to Namibia Wildlife Resorts.
The Namibia Ports Authority received just over N$240 million in ten years, but the report notes that Namport is also one of the major contributors to state coffers through substantial dividend payments.
The IPPR argues that taxpayers would likely be able to “stomach large investments every once in a while to finance a company that regularly makes modest profits on steady growth in revenue.”
The IPPR notes that the absence of dividends from Air Namibia and TransNamib “will not surprise anyone”.
“Namport, on the other hand, makes a decent case for itself when the full tables for transfers and dividends are compared.”
Praise for the good
The IPPR analysis reveals varying patterns.
“Some companies receive large transfers once in a while, but do not require assistance otherwise. This is defensible in principle,” the paper states.
It states that the public could accept a capital infusion to finance major new projects, especially in areas such as infrastructure provision.
“Other companies have shown a persistent pattern of large transfers. This may also be theoretically defensible,” the IPPR adds, singling out Air Namibia, which has “argued that the economic benefit its flights bring to the country far outweigh the cost to the taxpayer.”
But the analysis points out that a number of scandals over the years indicated that a lot of this spending was unnecessary.
Publicly funded enterprises should at least break even, although profits should not necessarily be the aim in all cases.
The IPPR points out that some state-owned enterprises do “sometimes” contribute to government finances.
“While some have never returned any revenue to the fiscus, others have contributed a fair amount over the years.”
Estimated dividends paid by commercial public enterprises include the Namibia Ports Authority (N$72 million), the NAC (N$1.2 million), Namcor (N$4.3 million) and the Lüderitz Waterfront (N$476 000).
Other commercial enterprise dividends, from companies that the government owns but has not yet classified as commercial public enterprises, include Namdeb, which contributed N$515 million in dividends over the past few years.
Namibia Post and Telecommunications Holdings Limited (NTPH) contributed N$575 million in dividends in recent years, and Rössing Uranium N$25.9 million.
JANA-MARI SMITH
Air Namibia was the main recipient, with more than N$6 billion transferred to the company since 2008, a briefing paper on public enterprise governance issued by the Institute of Public Policy Research (IPPR) indicates.
For the current financial year, the national airline received N$486.4 million from treasury, while TransNamib was allocated N$220.3 million.
The NAC pocketed more than N$1.196 billion from direct government subsidies over the past ten years and TransNamib received just a little less, at N$1.181 billion.
The IPPR tabulated the figures by consulting national budgets to estimate the transfers to a selection of commercial public enterprises over the past ten years.
“Given the difficulty of finding accurate figures for all years, these figures should not be read as the final word – in some years, it is likely transfers were higher than indicated, while downward revisions have also occurred occasionally,” the IPPR warns.
The estimates only include direct subsidies.
In Namcor's case, where the table shows government transfers of N$510 million over a decade, the IPPR notes that Namcor's earnings from the fuel levy, which accounted for “substantial transfers from the taxpayer”, were not included in the table.
The IPPR's briefing paper was a second analysis of the reform of state-owned enterprises through the introduction of a hybrid governance model.
Under the section of commercial public enterprises, which under the new system are entities that are meant to provide a product or render a service in the best interest of the public, the IPPR analysis states that the new system does not explicitly require these entities to be profitable.
Nevertheless, the IPPR notes that the nature of these enterprises, including Air Namibia, TransNamib, Epangelo, Namcor and Namibia Wildlife Resorts, “implies that they should at the very least be somewhat efficient”.
“It is ironic, given the fact that many of them actually have substantial income streams, that commercial public enterprises have required such a disproportionate amount of government aid,” the IPPR paper adds.
Their dependence of many of these entities on state bailouts and other financial assistance was highlighted when the minister of public enterprises, Leon Jooste, recently “singled them [commercial public enterprises] out as having a particularly high failure rate.”
The IPPR summary includes transfers of close to N$82 million to Epangelo, N$290 million to Namibia Power Corporation and N$117 million to Namibia Wildlife Resorts.
The Namibia Ports Authority received just over N$240 million in ten years, but the report notes that Namport is also one of the major contributors to state coffers through substantial dividend payments.
The IPPR argues that taxpayers would likely be able to “stomach large investments every once in a while to finance a company that regularly makes modest profits on steady growth in revenue.”
The IPPR notes that the absence of dividends from Air Namibia and TransNamib “will not surprise anyone”.
“Namport, on the other hand, makes a decent case for itself when the full tables for transfers and dividends are compared.”
Praise for the good
The IPPR analysis reveals varying patterns.
“Some companies receive large transfers once in a while, but do not require assistance otherwise. This is defensible in principle,” the paper states.
It states that the public could accept a capital infusion to finance major new projects, especially in areas such as infrastructure provision.
“Other companies have shown a persistent pattern of large transfers. This may also be theoretically defensible,” the IPPR adds, singling out Air Namibia, which has “argued that the economic benefit its flights bring to the country far outweigh the cost to the taxpayer.”
But the analysis points out that a number of scandals over the years indicated that a lot of this spending was unnecessary.
Publicly funded enterprises should at least break even, although profits should not necessarily be the aim in all cases.
The IPPR points out that some state-owned enterprises do “sometimes” contribute to government finances.
“While some have never returned any revenue to the fiscus, others have contributed a fair amount over the years.”
Estimated dividends paid by commercial public enterprises include the Namibia Ports Authority (N$72 million), the NAC (N$1.2 million), Namcor (N$4.3 million) and the Lüderitz Waterfront (N$476 000).
Other commercial enterprise dividends, from companies that the government owns but has not yet classified as commercial public enterprises, include Namdeb, which contributed N$515 million in dividends over the past few years.
Namibia Post and Telecommunications Holdings Limited (NTPH) contributed N$575 million in dividends in recent years, and Rössing Uranium N$25.9 million.
JANA-MARI SMITH
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