Geingob Proposes New Ministry

PRIME Minister Hage Geingob has proposed that the State-owned Enterprises Governance Council (SOEGC) should become the Ministry of Public Enterprises.

Speaking in the National Assembly yesterday Geingob said it was for the good of the enterprises governance council to have a body that oversees the functions and responsibilities of the 72 parastatals.

“A new ministerial body should be established to ensure that the SOEs are held accountable for their actions and for there to be supervision and guidance,” said Geingob.

The SOEGC was established in terms of Act No.2 of 2006 to provide governance to state-owned enterprises on behalf of government.

Its objectives were to handle daily activities in terms of performance monitoring, research and providing aice on company restructuring.

Geingob said the body’s ultimate goal was to ensure that the SOE sector is sustainable and contributes to economic development, citizens’ welfare and the realisation of Vision 2030 goals.

He said the effectiveness of the SOE sector has, however, been characterised by negative trends such as increasing high State financial bailouts to sustain structures, monopolistic practices resulting in uncontrollable prices to the concern of the public and low productivity and contribution to the nation’s developmental goals.

Geingob said SOEs have been exposed to huge debts, poor leadership at both board and management levels and that remuneration for executives was not linked to productivity and the ability to carry the expenditure burden.

“These and other ills such as resource wastage, bankruptcies and boardroom infighting associated with SOEs in the country are symptomatic of the prevailing ineffectiveness in the SOE governance environment,” said Geingob.

The PM also pointed out that the current dual governance model of SOEs has multiple layers of authority and communication which makes it difficult for the council to efficiently and effectively perform oversight functions stipulated in the SOEGC Act.

Geingob said it is for this purpose that there should be a dedicated entity that is adequately resourced and with staff members equipped with special knowledge to carry out, on a full time basis, the functions of information collection, data processing and rendering of professional aice to government.

“It was reported in 2013 that of the 72 SOEs, 43 failed to submit any documentation on their operations for audit purposes. SOEs fail to submit their annual reports to the SOEGC on time as well as to parliament and thus they interfere with the effectiveness of the statutory functions of these institutions,” said Geingob.

The proposal was taken well by parliamentarians.

Source : The Namibian