SOEs' national purpose and strategy

Last week, we were treated to headlines about bailouts and the performances of our state-owned enterprises (SOEs).

At the centre of the discussion was Iipumbu Shiimi, the portfolio minister of public enterprises.

Uncharacteristically, Shiimi used rather colourful language to describe the performance of SOEs, which fall under his direction and control.

He told the public that the performances of our SOEs are mediocre and that they are ineffective in providing service delivery.

This unusually sharp-tongued critique didn’t end there.

He added: “Many of our public enterprises are struggling, so there is almost a crisis every day at [public enterprises]. Every day, we are confronted with one of them that needs money.”

Like other ministers who have become observers, Shiimi did not provide any clear strategy, plans or step-by-step actions he and the ministry will take to address problems he has diagnosed and announced to the public.

Nowadays, one could confuse our ministers for analysts.

The Public Enterprises Governance Act (PEGA) empowers the minister to launch an investigation into the operation of any public enterprise. It remains unclear whether Shiimi’s diagnosis is based on a scientific study or report resulting from an investigation he launched as authorised by the Act.

One can only hope it is not based on emails and WhatsApp messages he exchanged with board chairpersons and chief executives.

The simple question is: on what basis is the minister making these findings? Granted, there are serious governance issues in our public enterprises. For example, the University of Namibia, which produces chartered accountants, has reportedly not produced financial statements since 2018 – for the past five years. It means that, as a country, we cannot independently confirm the financial dealings of the country’s top university.

Why is this the case?

It is indicative of the seriousness of the state of our public enterprises. While acknowledging the seriousness of this matter, we still expect the minister to speak from an informed and scientific basis and provide an informed direction. This has not occurred. Our experiences with public enterprises have been interesting. Historically, and embarrassingly, public enterprises did function very well under apartheid.

During apartheid, the National Housing Enterprise (NHE) worked very well, with the results still visible today. In fact, there are houses built by the NHE after independence whose quality does not compare to the houses – still standing – that were built under the apartheid-era NHE. It is the same with TransNamib and other SOEs.

How did this happen? The answer may be that because of racism and because apartheid served only the few, SOEs under apartheid were perceived as successful. Is this truly the case? Regarding housing again, did apartheid-era SOEs build houses for whites or for blacks?

Who built the houses in Katutura after the old location, and for whom? Who built houses for the workers in Arandis, some of which are still standing today, and for whom? Is it not the case that if you go to Keetmanshoop, Rundu, Katima Mulilo, Ondangwa and other towns, you will find houses of the same design built for the locals? The state, even in the capitalist apartheid era, was already clear and directed SOEs.

Apartheid ministers responsible for public enterprises did not complain like Shiimi. They provided clear direction.

The passing of PEGA and the creation of dual reporting lines between the 'minister' and 'relevant minister' have created more problems than solutions. The other day, a colleague asked this question at the workshop: why was a whole ministry of public enterprises created?

After abolishing the ministry, because it is not needed, did these guys reflect on whether the law is still relevant given that the ministry is not relevant? PEGA has solved old problems, yes, but it has also created new problems.

In a close analysis, it may actually be that the reason why the University of Namibia has not produced financial statements for five years, without any consequences and while hypocritically graduating chartered accountants, is found in the new problems created by PEGA.

SOEs are now reduced to careerism, with executives moving from one SOE to the next, hunting for increased salaries. These executives, whom Shiimi calls mediocre, have now created an identity without an ideological basis. Finding a male SOE executive without a suit is as rare as finding a uranium stockpile for future Namibian generations.

These executives have even created an association where they elect each other to fight for their interests at the feet of their complaining ministers, who have publicly labelled them as mediocre.

This association has not produced any research or report on the state of SOEs or any diagnostic report on any serious governance matter involving SOEs.

Like their minister, they have no clear strategy or plan to provide to the public.

Another problem, as we conclude, is the classification of SOEs on the basis of money. All those SOEs that are making money have been labelled commercial and under the control of the finance minister.

Other entities, such as the National Heritage Council, have been placed under the culture ministry. One wonders: should the Heritage Council start making more money than TransNamib, would it be reclassified? It was the wrong move to use money as the only indicator.

Line ministries, where functional expertise is available, could assist SOEs beyond money.

It is sad, but it must be announced, that there is no national purpose or strategy brought forward by those who are unfortunately leading us.

In the land of the blind, the one-eyed individual is king. May God help us see so that the one-eyed no longer misdirect us.

*Muthoni waKongola is a native of Kongola in the Zambezi Region primarily concerned with analysing society and offering ideas for a better Namibia. She is reachable at [email protected] or @wakongola on Twitter / X.