Namibian Government Strategizes to Boost SOE Governance

Gross Barmen, Namibia – The Ministry of Finance and Public Enterprises in Namibia is set to launch a new strategy aimed at enhancing the governance and effectiveness of State-owned enterprises (SOEs). This approach focuses particularly on improving the performance of their boards.

According to Namibian Press Agency (NAMPA), who spoke during the public enterprises conference held in Gross Barmen this past week, the plan involves recruiting seasoned individuals to serve on SOE boards and implementing a rigorous system for evaluating their performance. Shiimi highlighted the government’s previous lack of active involvement in the management of public enterprises, which this new strategy aims to address.

The minister emphasized the need for experienced board members who can provide robust leadership and oversight, ensuring that internal conflicts do not undermine the organization’s objectives. He acknowledged the past challenges in board performance evaluation, noting that self-evaluations often resulted in overly positive assessments.

In order to strengthen governance, the ministry plans to enhance the training and development of board members. Future renewals of board mandates will be contingent on their demonstrated effectiveness. Shiimi also mentioned that performance agreements with board members would be more specific, incorporating key performance indicators (KPIs) relevant to each SOE’s mandate. For example, if an SOE is in the electricity sector, its performance will be evaluated based on its ability to deliver electricity effectively.

Shiimi also proposed linking executive remuneration in SOEs to performance outcomes, with bonuses being awarded based on clear indicators of performance. This change is designed to incentivize higher standards of management and operational efficiency within SOEs.

Additionally, the ministry intends to enforce compliance with the Public Enterprises Governance Act (PEGA) of 2009 more strictly. Shiimi revealed plans to develop a compliance scorecard that will assess SOEs’ adherence to various requirements of PEGA. The minister expressed concern over a prevalent culture of non-compliance among SOEs, citing instances where financial statements requested from SOEs were often incomplete or not audited in accordance with legal requirements.