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Namibia’s Reforms of State-Owned Enterprises: Past experiences and challenges ahead Presentation by Herbert Jauch for the Namibia Economic Society & Friedrich Ebert Stiftung, Namibia 16 August 2012. Recent Headlines. “Labour Commissioner advises against NAC retrenchments”, 23 March 2012

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Recent Headlines

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  1. Namibia’s Reforms of State-Owned Enterprises: Past experiences and challenges aheadPresentation by Herbert Jauch for the Namibia Economic Society & Friedrich Ebert Stiftung, Namibia16 August 2012

  2. Recent Headlines • “Labour Commissioner advises against NAC retrenchments”, 23 March 2012 • “Airports Company botches streamlining”, 10 April 2012 • “NWR on brink of collapse”, 21 May 2012 • “Millions lost at NWR for paying work not done”, 20 June 2012 • “RA owes millions to contractors”, 21 June 2012 • “Super golden handshake for Aupindi”, 26 June 2012 • “Nalisa becomes NAC’s hot potato”, 7 August 2012

  3. The Background • The global wave of neo-liberal economic policies in the 1980s and 1990s • Prescriptions of the “Washington Consensus” • “Commercialisation” and outsourcing of government functions in Namibia: MWTC 2000; NWR; Namwater etc.

  4. NDP1 and WASCOM • Government to withdraw from activities that can be more effectively undertaken by the private sector; • Review of the ownership, management structure and pricing policies of SOEs; • SOEs to become increasingly self-financing or more open to competition, or will be privatised altogether; • Reduce the number of civil servants; • Increase the payment for SOE services

  5. Impact of “commercialisation” • Mixed results in terms of financial performance • Large price increases at several SOEs, including Namwater, NWR, Telecom and Nampost • Increase of insecure forms of employment (temporary contracts) • Failure to introduce performance-based management packages

  6. A luta continua?

  7. Proposed SOE Governance Policy Framework (2001) • Establish SOE Governance Council, Divestiture Sub-Committee and Central Governance Agency (monitor performance) • Distinguish between regulatory SOEs and service –rendering SOEs • Open “money-making” SOEs for private sector participation (Helmut Angula)

  8. NUNW Proposals (2001) • Establish single controlling body representing all social partners • Safeguard affordable services • Group SOEs into different categories • Reduce management packages in line with economic realities • Ensure transparency and accountability

  9. Johannes !Gawaxab (2012) • Govt. plays too many roles (owner, regulator, shareholder etc) • SOEs need accountability and skilled leadership • Stop “political appointments” • SOEs play an important role to address market deficits and to promote economic development and employment creation

  10. SOE Governance Act 2006 SOE Governance Council was established with wide-ranging powers on policies, investments, remuneration of boards and senior management as well as monitoring

  11. Which way for SOEs?

  12. Conclusion • Specific SOEs require specific, targeted interventions • Emphasis should be on social and economic efficiency • SOEs have to serve developmental interventions and safeguard affordable services

  13. Immediate Steps • Gradual but systematic reduction of inflated management packages • Careful choice of board and management based on skills and performance • Introduce performance management systems, monitor closely and hold board and management accountable • Political will and technical competency is crucial for successful SOE reform Thank you !

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