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Restructuring of SOEs commences 

Restructuring of SOEs commences 

Business Reporter

THE Minister of Public Enterprises, Leon Jooste, has announced the coming into effect of the Public Enterprises Act, 2019, which aims to remedy the ailing State-Owned Enterprises (SOEs) which continue to depend on government bailouts. 

 

The act makes provision for the efficient governance of parastatals, as well as monitoring their performances and restructuring them. It also outlines the powers and functions of the minister of public enterprises.

 

The newly activated Public Enterprise Act is set to see major changes within the public sector, as the minister stated that the most fundamental anomalies identified in the design of the new governance architecture was to address the scenario where potential conflict of interests existed in cases where some authorities or ministries had complete control over all policy formulation, regulatory functions and implementation within the sector. 

 

Jooste further stated that this created fertile ground for possible unintended uncompetitive behaviour and might have influenced the slow liberalisation of certain sectors of the economy. 

 

Mentioning some of the highlights of the Act, Jooste noted that government agreements will be entered into by a relevant minister with the board of a public enterprise.

 

NEW RULES: Minister of Public Enterprises, Leon Jooste.

 

In addition, chapter 2 of the Act states that a person will only be allowed to serve on two boards of Public Enterprises. 

 

On the pervasive issue of corruption within the public sector, Jooste noted that if an official being investigated destroys or alters any documents relevant to the investigation, they will be fined not more than N$100 000 or to two years in prison, or both.

 

The minister also added that should a minister suspects corruption, based on the report, they are required to refer the report to the Anti-Corruption Commission (ACC).  Should there be reason to suspect that any other criminal activity has occurred, the report must be referred to the Inspector General of the Namibian Police.

 

Jooste further stated that board of commercial public enterprises are appointed by the Minister of Public Enterprises in consultation with Cabinet and that all board appointments must be gazetted.

 

“The new process has already been introduced where board vacancies are advertised in the local media and prospective board members are interviewed by a panel where industry experts are also invited to participate,” Jooste stated. 

 

The minister further stated that all non-commercial entities would resort under their respective line ministries and all financial institutions, such as the Development Bank of Namibia and Agriculture Bank of Namibia, would fall under the Ministry of Finance. He added that this year, the ministry would also implement the Hybrid Governance Model for Namibian Public Enterprises, as approved by the government in 2016.

 

The ministry further stated that it plans to pay special attention to subsidiaries and will request full disclosure of relevant subsidiary information from all public enterprises. 

 

Jooste added that it is important to note that a public enterprise may only be considered for restructuring “in consultation with Cabinet,”. 

 

“I want this to be noted to allay fears that the minister will have the power to unilaterally embark on restructuring without him requiring Cabinet approval. When restructuring is contemplated, we are bound by the Act to take into account the purpose for which the public enterprises was created, a risk assessment and impact report, the performance of the public enterprise, the reasons for restructuring and any representations made by any relevant stakeholder,” Jooste said.