The Namibian Government found it necessary to identify and implement procedures that will provide strong incentives for cost containment, quality service improvement and maintenance of assets, while expanding on business opportunities.
As a result, the Ministry of Public Enterprises produced its first edition of Principles, Policy frameworks, and directives for Public Enterprises in Namibia.
The Principles, Policy Frameworks and Directives clarifies shared expectations for business conduct in Public Enterprises in Namibia and provide a point of reference.
Various sources were consulted in the development of the document which, mainly, includes Public Service Governance Act (Act no.2 of 2006) (as amended), the king III Report, the OECD Guidelines and the protocol on Corporate Governance in the Public Sector from the Department of Public Enterprises of South Africa.
The State-Owned Enterprise Governance Council (SOEGC) was established in terms of the State Owned Enterprises Governance Act, (Act No.2 of 2006) to primarily provide efficient governance of State Owned Enterprises (SOEs) on behalf of Government as the owner/shareholder, vested with concomitant powers and responsibilities for implementing an integrated governance policy framework against which to monitor compliance by SOE's.
The Public Enterprises Governance Amendment Act (PEG Act) came into existence during 2015 whereby the Ministry replaced the SOEGC and transformed to a Ministry.
The new Ministry was to be led by Hon. Leon Jooste, as Minister and Hon. Angel !Nawatiseb as the Deputy Minister, with Mr. Frans Tseehama the Permanent Secretary.
However, the Ministry inherited critical challenges pertaining to the Public Enterprises landscape that includes a myriad of complexities surrounding non-performing public enterprises.
This multiple-principal agency scenario blurs reporting and accountability lines due to the presence of different role players and also result in delays to, timely, arrive at crucial decisions required to address business challenges.
The current dual governance model of the PE’s sector where ownership responsibility is shared between the line Ministry and the MPE, is cited as a key hindrance to PE efficiency. Accordingly, the dual model, with its multiple owners (Cabinet, MOPE, various portfolio Ministers, Boards of Directors and Management /Executives of PE’s) have too many layers of authority and communication which makes it difficult for the Ministry to efficiently and effectively perform its oversight functions as stipulated in the PEG Act.
MOPE was established through an Act of Parliament, on 21 March 2016 by HE Dr. Hage Geingob, President of the Republic of Namibia. The main objectives was to reform Public Enterprises (PE’s). In 2006 State-Owned- Enterprises Governance Act, provided for Dual model of ownership and governance of PE’s. During the tenure of State-Owned-Enterprises Governance Council (SOEGC) a number of “owners” or supervisors were giving PE’s guidelines, policy directives and operational level instructions.
The layers included:
- SOEGC and its Secretariat
- Portfolio Ministers
- Boards of Directors and the Management/Executives of PE’s
Based on comparative studies, analyses and bench-marking MPE concluded that the dual governance structure for PE’s was unsustainable, inadequate and too cumbersome.
Hence, on 19 July 2016, Cabinet adopted the Hybrid Governance Model for Namibian Public Enterprises.