STAFF WRITER
GOVERNMENT has contributed to the continued financial failures at the Namibia Petroleum Corporation (NAMCOR) for more than two decades through strict regulation of fuel prices , a situation that has also not spared private players in Namibia, a state source close to the company’s dealings has said.
The source told Namibia Business Review yesterday that, “ The sales and marketing of petroleum products is a very difficult and complex undertaking especially in Namibia where the prices are regulated by government.”
According to the source Namcor has been asking the government to adjust the basic fuel price formula even before the former Managing Director Imms Mulunga joined the entity, to no avail.
“The losses from the Glencore deal in 2011 were because of the same issue. Even the private players are struggling but at least they have parent companies to bail them out. This information does not come out in the media,” the source said.
The source also questioned the ability of the current Board of NAMCOR to deal with the complex issues of poor performance at NAMCOR without in-depth understanding of the industry.
This comes after the state petroleum company released a lengthy statement on Sunday detailing its financial challenges and a rather precarious financial situation for the future.
The statement by NAMCOR which seemingly placed the struggles of the parastatal on the Mulunga regime said, “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.
in the cost of sales, which escalated from N$ 559 million to N$ 7.5 billion over the same period.”
According to the company, the substantial increase in revenue did not help NAMCOR to achieve profitability. They said the company recorded its worst losses in 2023, where NAMCOR posted a net loss of N$ 1.3 billion.
“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, 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,” the company said.
They said a surge in trading activity adversely affected the working capital,profitability, and cash flow position.
EXCUSES, EXCUSES AND MORE EXCUSES
Meanwhile Mulunga told Namibia Business Review that sorry state of the parastatal cannot be blamed on him adding that this regime saw a change in revenue flows at the company.
“These allegations cannot go unchallenged. I left Namcor in April 2023 already and the company got a bail out last year but is still making losses. How can you still blame that on me? It seems like it’s easier to continue putting the blame on Mulunga forever. Plus the company made profits for the majority of the years that I was in charge although there were losses also. The losses that were made were not necessarily due to mismanagement but due to unfavorable market conditions and the unwillingness of the shareholder to assist the company like other mother companies did to their Namibian affiliates,” he said.
MORE TO IT
Affirmative Reposition leader Job Amupanda on Sunday also weighed in on the poor performance of the parastatal, blaming the government allegedly engaging foreign to take over the company’s ballooning debt.
Amupanda also warned the board of the company over the current situation in the company.
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