Punish Reckless Trading at Parastatals

In a normal world, directors and managers at many of Namibia’s state-owned enterprises would have routinely faced criminal charges and served jail time for reckless trading. If only…

But such legal implications exist only in the real world, unlike joker places as depicted in Leon Schuster’s fictitious country called Nambabwe in ‘O Schucks…! Here Comes Untag’.

Namibia’s parastatals behave like jokers and don’t care about misusing taxpayer money.

Public funds are constantly raided to bail out reckless and fraudulent dealings and outright theft at public companies to sustain lifestyles of conspicuous consumption of special comrades.

Parasites, uhm parastatals, like Meatco, Fishcor of Fishrot fame, NBC, SME Bank of Zimbabwe’s Enoch Kamushinda, ODC/NDC and the Social Security Commission are but a few examples.

“Reckless trading refers to a director taking illegitimate business risks,” according to www.gibsonsheat.com

Circumstances where a director can be personally liable to a company’s creditors include allowing business to be carried out when there’s a substantial loss to creditors.

“The company does not need to be in liquidation, and no knowledge of the reckless trading is required” for liability to occur.

Meatco was given a bailout of N$700 million in 2022 and 2023 after failing to pay its creditors.

It continued trading while directors and managers knew creditors like farmers were going bankrupt and farmworkers losing their jobs. Worse, the government, as a shareholder, was not informed in advance.

Unfortunately, our politicians acted as if they were helpless by signing off on more than the N$700 million in bailouts.

Having enjoyed a monopoly for decades, Meatco’s market share has fallen to lows of 25% in recent years. This has allowed competitors like Beefcor to overtake Meatco in the export of beef to the EU where Namibia is probably the only African country with a lucrative quota reserved.

Fishcor had become a past master of reckless trading for decades – even before the Fishrot scandal broke. Need we say anything more about Fishcor and the corruption scandal that saw fishing workers commit suicide?

On several occasions, the NBC would not even pay its employees’ medical contributions, leaving the broadcast workers without adequate medical attention. That’s reckless trading, followed by bailouts.

To this day, no one at the SME Bank has been charged after more than seven years when it was determined that more than N$250 million was stolen by directors and managers.

Overall, the billions lost in bailouts could have had a broad impact in supporting small businesses to produce food and other manufactured products through entrepreneurship.

The government must get out of running businesses where the market is well developed for competition to flourish.

A government’s role is to ensure oversight, enforce regulation for a level playing field and to promote SMEs to play a meaningful role in economic activities.

What is highly concerning is that there’s no end in sight to the sheer incompetence, mismanagement and theft, amid the bleeding of taxpayer funds, in bailing out the parastatals.

“Such resources are desperately needed to meet urgent priorities in social sectors such as education, health, housing and social protection,” minister of finance and public enterprises Iipumbu Shiimi told The Namibian when asked about the money the government has pumped into Meatco.

By our joker government standards, Iipumbu’s remark about wastage is courageous. Cabinet ministers are shortsighted in not supporting people like Shiimi who are trying to ensure that tax funds pay for voters’ needs and thus at election time the favour will be returned.
Looting and mismanagement drive voters away.

The first step to dealing with an intractable problem is acknowledgement: Kudos to minister Shiimi.

Next, as minister of public enterprises, he must put in place measures to ensure that directors and managers are punished for reckless business dealings.

Too many people take on roles in parastatals simply to line their pockets but fail to take seriously the responsibility that comes with the positions.

The state president, Cabinet ministers and bureaucrats should stop gambling away tax funds meant for providing drinking water, food production, education and health.

Recklessly running state-owned companies into the ground must be punished.

The damage inflicted on citizens, especially the most needy, is too ghastly.