Time for Leon Jooste to Walk the Talk

•Alexactus T Kaure THE YEAR 2016 will be remembered as the year of Namibian state-owned enterprises.

That was the year when all the inconsistencies, the contradictions, the illogicalities – in short, the paradoxes of the system – were heightened and highlighted.

The result has been a paralysis, a near collapse of the parastatal sector leading to a blurred vision and loss of direction of the broader public economy. They have become a bane and they never stop to bemuse, amuse and make headlines. The litany of cases of corruption, greed and mismanagement at state-owned enterprises (SOEs) or parastatals were staggering during 2016.

The headlines shook the little confidence the public had in the stewardship of SOEs. This in turn led to government’s 11th-hour attempt to improve the efficiency of some of these agencies, whose very existence has been precariously hanging in the balance for the past 25 years, with the establishment of the Ministry of Public Enterprises and the subsequent pronouncements and policy guidelines by minister Leon Jooste.

What will it take to stop the seemingly never-ending losses at these entities, which have become national symbols of greed, corruption, cronyism, nepotism, incompetence and shame?

If we cannot get the perspective right; then forget about the so-called reforms and turn-around/turn-about measures being suggested by government. The much-awaited “blueprint” for the restructuring of parastatals was unveiled late last year. This was a welcome move as it opened a small window of opportunity for public debate, dialogue and hopefully the way forward in 2017.

We are told that the ministry will have extensive powers to do a number of things:

* Draw up directives on performance agreements, criteria on the evaluation and performance of CEOs and senior managers and guidelines on the appointment of board members.

• The ministry will be responsible for determining the remuneration and benefits of boards, CEOs and senior management and this will be made public.

• Draw up criteria on the basis of which SOEs’ performance would be evaluated and measured.

• Put to an end unnecessary foreign travel by CEOs, merge some of the entities or even incorporate some into ministries.

The measures being proposed now are the minimal requirements that should have been in place right from the word go when we started to create these monsters.

Let us now start with our deconstruction journey. The first point to make is: with the coming into being of the public enterprises ministry and its wide-ranging powers, we must do away with the so-called line ministries.

Secondly, SOEs operate like secret societies and what is needed is more openness. It could be successfully argued that the existence of a cloud of secrecy and hostility to scrutiny among SOEs have led to the current malady.

I fully agree with and endorse the measures that the ministry wants to put in place, such as salaries and benefits of CEOs and management as well as tracking performace. The problem, however, is that we talk of parastatals as if the are private sector and we end up operating within the same capitalist (ill)logic.

Let us start with a simple question: does a newspaper like New Era or a news agency like Nampa need a board of directors? Do we really need a board of directors at most of these parastatals? Or are we simply doing the things that some of us were taught at business/management schools, that corporations ought to have boards of directors?

The layman’s question is: what use are the boards anyway? The pathetic part is that the directors are part of the problem but are never held liable for anything.

My suggestion is to cut out these middlemen [called boards] between the ministry and SOEs, with their hefty sitting allowances.

Above all, we cannot meaningfully reform the parastatal sector unless we address the thorny issue of stratospheric salary and benefit packages of CEOs and senior managers. The issue is not whether a particular parastatal is in the red or black. The question is one of unjustified resources transferred from the public to an individual to finance what amounts to a Gucci lifestyle befitting a private corporation’s management.

The issue here is not whether they pay dividends or are self-financing. High salary and benefit packages are bound to jeopardise the broader mission for which parastatals were created in the first place.

Stratospheric salaries represent a siphoning off of parastatals’ resources for private advantage and are equivalent to an unfair distribution of excess state revenue. The other transfer is built-in, as in all monopolistic operations. The consumer is squeezed out of the last penny like the way you would hold a chicken by the neck and shake it so hard that it lays the last egg. That is how NamPower, NamWater and Telecom, among others, make money – not because they are competitive in any way or their CEOs extra brilliant.

Part of the solution would be to bring the salaries of all CEOs on par with those in the public service. So, for example, the CEO of NamPower should get the same salary as the permanent secretary at the Ministry of Mines and Energy. And then you work the rest of the salary structure accordingly. And this should be on a “take it or leave it” basis.

This would not be an unusual move. It could be established that the salary and benefits of senior managers were excessive, then it is justifiable to cut them. In 2005, for example, the salary package of Telkom SA’s CEO was cut by 37% – from R11,14 million to R6,9 million. He did not resign in protest because he knew he was still being paid 100 times more than the average Telkom employee.

So, none of these CEOs at our parastatals would resign if you bring their salary on par with the rest of the civil service. There is nothing complicated in reforming the parastatal sector. But we have to carry it through to its logical conclusion instead of dilly-dallying around. Jooste must walk the talk.