Urgent need for SOE reform – Steytler
OGONE TLHAGE
WINDHOEK
Former economic advisor to the president and GIZ economist John Steytler says there is an urgent need to reform Namibia’s commercial public enterprises (PEs), considering their significance on the economy.
He made the comments at the launch of public enterprises ministry’s financial monitoring system, on which PEs will be required to submit financial and governance metrics for ongoing evaluation. He added that debt to gross domestic product (GDP) was key towards reforming PEs.
“The vast majority of these companies operate inefficiently and at a loss. Many PEs are dependent on massive liquidity support from the public purse, the tax payer,” Steytler said.
It is also concerning that PEs are now dependent on government for financial support despite poor state finances, he said.
“The overdependence of most PEs on the national budget and the systematic deterioration of the fiscal balances, with public debt now standing at an unsustainable level of about 70% of GDP, calls for a drastic transformation of the PE sector,” he added.
Big losses
According to him, MTC and NamPower’s profitability have hidden the losses PEs have made.
“If NamPower and MTC are removed from the commercial PE portfolio, the average loss on the portfolio over the past six years is around N$1 billion per annum,” Steytler said.
Also speaking at the launch was public enterprises minister Leon Jooste, who said the system would assist government greatly with regards to planned reforms of PEs.
“We had poor data available, outdated or flawed, inaccurate data. We [government] are [now] basing our decisions on real-time, accurate data. We are anxious to see reforms and we’ll get there,” he said.
Jooste also cited the time it took to reform struggling PEs in countries such as Singapore and Malaysia, and asked for patience, saying those countries too took a long time to successfully reform their PEs.
WINDHOEK
Former economic advisor to the president and GIZ economist John Steytler says there is an urgent need to reform Namibia’s commercial public enterprises (PEs), considering their significance on the economy.
He made the comments at the launch of public enterprises ministry’s financial monitoring system, on which PEs will be required to submit financial and governance metrics for ongoing evaluation. He added that debt to gross domestic product (GDP) was key towards reforming PEs.
“The vast majority of these companies operate inefficiently and at a loss. Many PEs are dependent on massive liquidity support from the public purse, the tax payer,” Steytler said.
It is also concerning that PEs are now dependent on government for financial support despite poor state finances, he said.
“The overdependence of most PEs on the national budget and the systematic deterioration of the fiscal balances, with public debt now standing at an unsustainable level of about 70% of GDP, calls for a drastic transformation of the PE sector,” he added.
Big losses
According to him, MTC and NamPower’s profitability have hidden the losses PEs have made.
“If NamPower and MTC are removed from the commercial PE portfolio, the average loss on the portfolio over the past six years is around N$1 billion per annum,” Steytler said.
Also speaking at the launch was public enterprises minister Leon Jooste, who said the system would assist government greatly with regards to planned reforms of PEs.
“We had poor data available, outdated or flawed, inaccurate data. We [government] are [now] basing our decisions on real-time, accurate data. We are anxious to see reforms and we’ll get there,” he said.
Jooste also cited the time it took to reform struggling PEs in countries such as Singapore and Malaysia, and asked for patience, saying those countries too took a long time to successfully reform their PEs.
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