SOEs draining the economy – Schlettwein

Windhoek-Many state-owned enterprises (SOEs) have for far too long been a drag on the Namibian economy by perpetually relying on government bailouts, a situation the minister of finance says should cease henceforth.

Bailouts are draining the already fragile local economy and SOEs must therefore get their acts together, Minister Calle Schlettwein urged yesterday.

"That scenario cannot continue," he said, during a well-attended meeting held in Windhoek yesterday.

SOEs must, instead, play their role in making the Namibian economy more competitive by providing affordable, sustainable and reliable services to citizens.

Schlettwein made these comments when addressing the chairpersons and chief executive officers of all SOEs in the country yesterday.

The Minister also consulted the SOE leaders on the upcoming budget and Medium Term Expenditure Framework (MTEF) for the 2017/2018 to 2019/2010 financial years, noting the need to broaden the scope of consultations in preparation for the budget. He emphasised the importance of sustainability for SOEs, calling it 'absolutely crucial' for the continued operation of these public entities.

"Sustainability particularly applies to those SOEs in the commercial sector, but even those that have a not-for-profit mandate must improve their sustainability," Schlettwein said.

With regard to affordability, he noted that if an SOE provided goods or services that were unaffordable then that would be "tantamount to failure".

As for services he said, "If your services are not continuously reliable then they become risky and anti-competitive".

As an example of unreliable services, Schlettwein mentioned the water restrictions that came into effect towards the end of 2016.

These restrictions, he said, managed to severely harm the economy and caused significant damage to the construction and other industries.

"All SOEs must have targets and these targets must be met. If we can achieve this then our economy will grow," Schlettwein said.

Minister of Public Enterprises Leon Jooste - also present at the meeting - applauded his finance counterpart for his approach to the 2017/18 budget, noting the transparency of the process and recommended that the meeting with SOEs should become an annual event. Jooste added that he anxiously awaited the new remuneration guidelines for SOEs on which the CEO Forum and Chairperson Forums had been consulted.

"I am still seeing a number of items of efficiency that can be addressed more aggressively.

"As SOEs we need to be careful when we spend our resources because everyone needs to tighten their belts," Jooste said. He was happy to note a high level of compliance with the directive that SOE board members need to apply for approval before travelling, but remained concerned that "board members still travel more than they should".

Schlettwein had consultations scheduled with the Public Service Commission, Public Office Bearers Commission, Judicial Service Commission and the Magistrates Commission on the same subject yesterday afternoon.

Source: New Era Newspaper Namibia