TIRI MASAWI
Resistance is growing over a government plan to change how Namibia’s state-owned companies are run. The plan, known as the Public Enterprise Governance Amendment (Pega), would give the Prime Minister more control over the sector.
The government wants the Prime Minister to take a central role in overseeing, governing and appointing leadership in commercial State-Owned Enterprises (SOEs). The bill is now being debated in Parliament.
Critics say the plan does not fix the real problems in SOEs. They point to ongoing financial losses, boardroom fights, and directors who sit on multiple boards at the same time. They also say the bill does not clearly show how SOEs will improve their performance or contribute more to the economy.
They further argue that there is not enough research to justify the changes. Some also say the bill repeats powers already covered in existing laws, instead of improving them.
A Parliamentary Standing Committee on Public Finance report valued Namibia’s SOEs at about N$120 billion in total assets, with a net asset value of around N$60 billion last year.
Pega seeks to redefine the roles of the relevant minister and the Prime Minister in managing public enterprises. It also introduces a recruitment committee and sets out how dividend agreements will be made between the Prime Minister, Finance Minister, and the relevant Minister.
The bill proposes that the Prime Minister plays a key role in appointing board members and chief executives of SOEs. It further moves several powers from the minister responsible for public enterprises and the Finance Minister to the Prime Minister.
Namibia currently classifies SOEs into three tiers based on revenue, assets, and staff numbers. This classification is mainly used to guide pay levels for senior management and board members.
POWER RETENTION
Independent Patriots for Change spokesperson and opposition leader in Parliament, Imms Nashinge, says the bill focuses too much on power instead of fixing real problems in SOEs.
He said Pega does not address weak financial management, lack of transparency in board appointments, and the fact that some people sit on many boards at once.
“We are saying Pega does not deal with real problems. Some people sit on several boards. That is not addressed. We want directors to focus on one board so they can perform better,” Nashinge said.
He also suggested a “cooling-off period” between board appointments to allow more qualified Namibians to serve.
Nashinge warned that political influence is also a problem.
“Some people are repeatedly appointed because of political connections. They move from one board to another while aligning themselves with the ruling elite,” he said.
Nashinge flagged the issue of conflicts of interest.
“We currently have a situation where an executive at National Petroleum Corporation of Namibia (Namcor) is a board member at Namport. How independent is this person when Namcor is a client of Namport? Such compromises will jeopardise the system,” he said.
AUTOCRATIC LEADERSHIP
Corporate governance expert Steve Galloway said giving too much power to one office is poor governance.
“It opens up to autocratic decisions by an individual. Pega is already a problem because of unfettered discretion placed in the hands of one minister,” he said.
He added that SOEs should not be political tools.
“SOEs are state, not political entities. These should be kept distinctly separate for good governance,” he said.
Galloway said performance should be measured through national development plans, strategic plans, and clear key performance indicators, not political instructions.
He also called for merit-based appointments and stronger governance systems.
“Namibia needs improved performance through meritocratic appointment of directors and modern governance codes like ISO 37000,” he said.
ISO 37000:2021 is an international standard that gives guidance on how organisations should be governed. It sets out 11 principles to support ethical, effective, and responsible management, and helps align strategy, purpose and value creation to build trust.
Galloway further said there is a need for proper evaluation systems.
“Board and director evaluations are very important. Performance contracts must be properly assessed, not controlled by one minister,” he said.
POOR RESEARCH
Corporate governance expert Ntelamo Ntelamo said Pega lacks in-depth research to justify its changes.
He said there is no evidence that poor SOE performance is caused by gaps in existing laws.
“No study was conducted to show that poor governance in SOEs comes from missing legal provisions. We are guessing the problem or ignoring what it is,” he said.
He also warned that the bill may duplicate existing legislation.
“There are still primary laws governing public enterprises. These amendments create overlapping roles: relevant Minister, Finance Minister and Prime Minister,” he said.
Ntelamo also said the structure is becoming too complex.
“These roles are too many, considering we already have boards running these entities,” he said.
“BOARDS OF POLITICAL STOOGES”
Ntelamo said Namibia’s SOE boards are often filled through political connections rather than merit.
“In the main, we seem to appoint stooges and credulous individuals on most boards. They come compromised and often lack understanding of what a board director should do,” he said.
He added that some board members follow political instructions instead of acting independently.
“This is contrary to corporate law principles which define the independence of a director,” he said.
He also criticised multiple board appointments.
“If an individual is already committed to multiple assignments, they must decline further appointments. But there is a love for board status and fees rather than competence,” he said.
He called for stronger accountability and enforcement.
“Let shareholder ministers, boards and CEOs be clear about their roles and be competent. Those who mismanage should be punished, regardless of position,” he said.
He also said there is no proper system to evaluate board performance.
“If there was evaluation, many heads would be rolling in poorly performing SOEs,” he said.
REFORM AND PRIVATISATION
Economist Robin Sherbourne said Namibia needs deeper reform of SOE governance instead of expanding political control.
“The State Owned Enterprise Governance Council used to be in the Office of the Prime Minister. We need fundamental SOE reform rather than tinkering at the edges,” he said.
He warned that political appointments reverse progress made in professionalising boards.
“Political appointments are a step backwards after years of trying to professionalise boards,” he said.
Sherbourne also said there should be limits on how many boards a person can sit on.
He called for broader reforms including liquidation, privatisation, and strategic partnerships for underperforming SOEs.
“Our system has improved over the past few years but further improvement is required,” he said.
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