Time to bring order to the SOE house

The passage by the National Assembly of the Public Enterprises Governance Amendment Bill could, if properly implemented, mark an important turning point in the governance of Namibia’s state-owned enterprises.

For too long, the governance of SOEs has appeared to ordinary Namibians as a maze of overlapping responsibilities, competing authorities and, at times, contradictory signals. The result has not merely been bureaucratic frustration. It has contributed to uncertainty over who is ultimately responsible when public enterprises fail to perform, when boards become dysfunctional, when chief executives are suspended or dismissed, or when millions of public dollars are placed at risk.

Hopefully, the latest legislative intervention will begin to clear that fog.

The central issue is not whether the Prime Minister should have more or fewer powers. The more important question is whether the State has finally created a governance framework in which everyone knows who is responsible for what and can therefore be held accountable for it.

The amendment removes the previous arrangement of having a single minister responsible for public enterprises and instead places individual SOEs under the ministers responsible for their respective sectors. At the same time, it gives the Prime Minister, in consultation with Cabinet, authority to issue binding directives on crucial matters including board appointments, executive appointments, remuneration, strategic plans, budgets, investments and dividend policies.

On paper, this makes considerable sense.

A state-owned airline, for example, operates in a fundamentally different environment from a water utility, a fishing enterprise, a telecommunications company or a national broadcaster. Sector ministers are therefore better placed to understand the policy environment in which their respective enterprises operate.

But decentralising responsibility can easily become another recipe for confusion unless there is a strong coordinating centre.

That is where the expanded role of the Prime Minister becomes important.

There must be no ambiguity about the distinction between ownership, oversight and management. Government owns these enterprises on behalf of the people. Ministers represent that ownership. Boards govern the enterprises. Chief executives manage them. Officials execute policy. The lines must never be blurred.

The greatest danger facing SOEs is not necessarily government involvement. It is unclear government involvement.

When politicians interfere selectively, when boards receive conflicting instructions, when ministers seek to manage what should be left to boards, or when boards believe they are answerable to several competing centres of power, accountability disappears.

And when accountability disappears, failure becomes everybody’s problem and nobody’s responsibility.

Namibia has seen enough of this.

There have been instances where boards have been appointed and removed amid controversy, chief executives have enjoyed uncertain tenure, and enterprises have struggled with financial and operational challenges while the public is left wondering who is actually in charge.

The country cannot afford another cycle in which ministers blame boards, boards blame management, management blames government and, ultimately, the taxpayer picks up the bill.

The new framework must therefore be judged not by how much power it gives the Prime Minister, but by whether it produces better-performing and more accountable public enterprises.

The introduction of three-year board terms, with only one additional term as the normal rule, is also welcome. Boards should not become permanent clubs. At the same time, the provision allowing a third consecutive term in exceptional circumstances where there is a serious skills shortage is sensible, provided that “exceptional” does not become another word for political convenience.

Competence must be the currency of public enterprise governance.

The same principle must apply to the appointment of chief executives. Namibia’s SOEs should not be laboratories for political patronage. The best person for the job should get the job, regardless of political connections.

If the Government is serious about transforming SOEs into institutions that deliver value to Namibians, then appointments must be based on competence, experience, integrity and measurable performance.

The provisions dealing with remuneration are equally important. Public enterprises cannot operate indefinitely with executive compensation structures that are disconnected from their financial realities. Equally, government should not use remuneration policy to attract mediocrity. There must be a rational relationship between performance, responsibility and reward.

Perhaps most importantly, the amendment introduces greater discipline around strategic plans, budgets, investment decisions and dividends.

This is long overdue.

Commercial public enterprises exist, in part, to generate value. Where an enterprise is profitable, the State should have a clear policy on what portion of those profits should be reinvested and what portion should return to the shareholder ultimately the Namibian people.

A formal dividend policy can help replace ad hoc decisions with predictable corporate governance.

But legislation is only the beginning.

The real test will come when the new framework is implemented. A beautifully drafted law will achieve little if the old habits remain. Namibia does not suffer from a shortage of laws, policies and regulations. It sometimes suffers from a shortage of consistent implementation.

The retrospective validation of actions taken since 21 March 2025 also deserves careful attention. While such a provision may be necessary to regularise decisions made during the transitional period, retrospective validation should never become a substitute for accountability. Parliament and the public must still be able to ask whether decisions were lawful, reasonable and in the national interest.

Ultimately, the objective should be simple: one government, one coherent ownership policy, clear lines of authority and measurable accountability.

The SOE landscape has for too long appeared chaotic to the public. That chaos has damaged confidence, weakened institutions and, in some cases, cost taxpayers dearly.

The Prime Minister’s expanded role therefore comes with an equally expanded responsibility.

If the new system succeeds, Namibia should see fewer turf battles, fewer contradictory directives, stronger boards, more professional management and clearer accountability when things go wrong.

That is what Namibians should expect.

We should not celebrate the passage of another amendment merely because Parliament has passed it. We should celebrate when the reform begins producing results.

The country needs its SOEs to work.

Hopefully, this new governance architecture will finally bring some normality and stability to a system that has, for too long, been characterised by confusion and uncertainty.

The time for everyone pointing fingers must end.

There must now be clarity about who is in charge and, just as importantly, who is accountable.