Company still reeling in losses resulting from governance lapses
Business Reporter
THE National Petroleum Corporation of Namibia (NAMCOR) has refuted reports that its former Managing Director, Immanuel Mulunga, has won a labour court case against his dismissal, adding that the company is still reeling from losses caused by governance lapses perpetuated during Mulunga’s era.
“It has been erroneously reported in one of the local English daily newspapers that ‘Immanuel Mulunga has won an unfair dismissal labour case against the state-owned oil company’. This is a gross misrepresentation of the actual contents and findings of the arbitrator’s ruling. The arbitrator’s ruling of 6 June 2025 did not make any findings or determinations on the alleged unfair dismissal. In fact, the issue of Mr Mulunga’s purported unfair dismissal has not yet been heard, argued, or adjudicated. It remains entirely unresolved and is still pending before the appropriate forum. The matter is still pending before the appropriate forum and is scheduled to be heard between 8–10 September 2025,” Utaara Hoveka, NAMCOR spokesperson, said.
He added that the ruling in question dealt exclusively with a counterclaim brought by NAMCOR concerning an alleged breach of the employment contract by Mulunga. Hoveka added that NAMCOR is currently considering its legal options in respect of this ruling and will act in accordance with the best interests of the company.
He added that NAMCOR Trading and Distribution has recorded inconsistent performance due to a combination of serious governance lapses, non-compliance with policies, and operational systems challenges.
“These include inadequate internal controls, systems override, stock theft, trading losses, and potential reckless trading. Since 2018, the cumulative impact of these shortcomings has progressively weakened NAMCOR’s operational effectiveness and financial sustainability. NAMCOR’s revenue increased significantly from N$610 million in 2017/18 to N$7.4 billion in 2022/23. However, this growth was accompanied by a steep rise in the cost of sales, which escalated from N$559 million to N$7.5 billion over the same period. Despite the substantial increase in revenue, NAMCOR did not achieve profitability. In fact, the sharpest losses were recorded in 2023, when NAMCOR posted a net loss of N$1.3 billion, indicating that high revenue growth alone did not translate into financial sustainability,” Hoveka said.
He added that it is crucial to note that these losses were predominantly driven by NAMCOR Trading, which engaged in high-volume transactions that failed to generate sufficient margins.
“It is also important to highlight that NAMCOR Trading held one of the lowest market shares in the industry, estimated between 7% and 8% during the same period. This limited market positioning constrained its pricing power and competitiveness, further contributing to the sustained losses. Overall, the surge in trading activity adversely affected the company’s working capital, profitability, and cash flow position, rather than strengthening its overall financial sustainability,” Hoveka said.
He added that several additional factors have significantly eroded NAMCOR’s financial position over the past five years. These include the oversupply of petroleum products, lack of hedging and poor margin management, expensive credit facilities from suppliers eroding margins further, and excessive credit facilities non-procedurally granted and poor debtors’ collections.
In addition to this, the company experienced theft and loss of product and the acquisition of encumbered and unauthorised assets.
“These challenges impacted NAMCOR’s ability to consistently deliver on its strategic objectives and negatively affected its liquidity, profitability, and operational sustainability. Consequently, they triggered a period of financial distress that posed an existential risk to the company’s continued operations. To temporarily address these financial and operational challenges, NAMCOR received a N$1.2 billion Government guarantee in April 2024, which was utilised to obtain loan funding from commercial banks. The proceeds from these loans were used to settle a major part of NAMCOR’s long-outstanding creditors. Liquidity challenges remain persistent, and support may be required to clear the remaining long-outstanding creditor balances,” Hoveka said.
