Overall improvement reported
NAMIBIA’S Public Enterprise (PE) sector is quite sizable and has over the years come to present a significant fiscal risk.
Leon Jooste, the Minister of Public Enterprises, however, stated that the effective implementation of the envisaged public enterprises reform is bound to address inefficiances and improve profitability.
Responding to some questions on the overall performance of the sector, Jooste stated that the performance of the total portfolio of PE’s improved overall from a total loss of N$938 million in 2016/17 and close to breaking even in 2017/18.
He added that although it is difficult to reduce the wage bill, it is worth noting that the level of profitability for commercial PE’s increased from 2016/17 to 2017/18 from a total of N$840 million to N$1.9 billion – meaning that coverage of the wage bill and other expenditure has improved.
He also stated that subsidy allocations, specifically to commercial PE’s, are now being carefully monitored by both the Ministry of Finance and Ministry of Public Enterprises in line with approved business plans and budgets.
Jooste noted that the new Public Enterprises Governance Act will be promulgated during the first quarter of 2019 and implementation will start immediately.
He said examples of intervention can be found in the new Integrated Strategic Business Plan (ISBP) for TransNamib that was approved in 2018 and will be implemented this year.
Last year, a troubled TransNamib announced that it needs about N$2 billion to implements its five-year strategic plan.
This was revealed by its chief executive officer, Johny Smith, during a consultative meeting with the Parliamentary Standing Committee on Economics and Public Administration in Windhoek in December 2018.
Jooste noted that a new TransNamib board will be appointed in February 2019 to ensure that the ISBP is implemented expeditiously.
“An efficient TransNamib will unlock the large investment made into the Walvis Bay Port expansion project, resulting in a positive knock-on effect,” Jooste said.
He further noted that the process to redefine Air Namibia’s Business Model and produce a new ISBP will be concluded by March.
“An entirely new Performance Based system will be introduced this year (under the new Act) and the Ministry of Public Enterprises will finally be able to embrace its true mandate as a professional, active shareholder of these complicated entities. The Ministry has equipped itself with highly skilled individuals to perform this intricate function since our skills now match those of the entities we will be responsible for,” Jooste detailed.
He emphasised that the promulgation of the new Public Enterprises Act will allow for the transformation of the State as shareholder into a specialised, active shareholder with an intimate understanding of each Public Enterprise.
“The revival of our economy will be impossible without the reform of our Public Enterprises and bold decisions will have to be taken without delay to prevent any undue consequences,” Jooste warned.