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Namibia’s Institute for Public Policy Research (IPPR) calls for complete autonomy of public enterprises citing their inability to be dynamic and responsive within the existing institutional framework under the government.
Businesses and government entities operate under fundamentally different paradigms due to distinct incentives and institutional frameworks. This is one of the major impediments for government-owned businesses to be dynamic and responsive, primarily attributing these issues to bureaucratic processes. Such administrative hurdles hinder the efficiency and flexibility of government-run businesses, making them slow-moving and unreformable.
IPPR advocates for a clear division between the business sector and the government sector, where businesses are left to run themselves with minimal interference. That’s why one has a business sector and a government sector. Government is the referee, impartial, penalising when necessary, setting the rules, and then letting everyone get on with it.
A broader debate on the role of government in the economy, with some arguing for less government intervention and greater autonomy for businesses to drive economic growth. This comes as the Namibian government in 2021 announced plans to set up a central holding company that will own all its commercial Public Enterprises within the next three years. The plan, according to the then Public Enterprises Minister, was based on the Singapore and Malaysia model, where a central holding company becomes the owner of all commercial Public Enterprises and reports to the Minister of Finance in line with the provisions of the State Finance Act.
The plan allows shareholder functions to be greatly enhanced when the shareholder powers and budgetary functions are consolidated under the Ministry of Finance since they will then have direct oversight of the financial and operational performance of the Public Enterprises and subsidies can then be more accurately aligned to compliance and performance.
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The Department of Public Enterprises, which now falls under the Ministry of Finance, currently oversees the functions and responsibilities of the 98 public enterprises. Last month the government said it will consider which state-owned public enterprises it will continue to own and operate in collaboration with private businesses or sell once the Ownership Policy Framework of entities has been finalised.
