What happened to SOEs? – Kavekotora

 

Opposition member of parliament, Mike Kavekotora has asked for the State Owned Enterprises minister, Leon Jooste to outline the factors that contributed to the collapse in SOE governance.

 

 

Kavekotora argued that several state owned enterprises were thriving before independence and posted healthy profit margins with reserves that ran into millions of dollars, which is no longer the case.

 

 

“As far as I am concerned any solution to a problem is just good as the quality of the problem definition. In other words one cannot expect good results to a situation that has not been properly defined. I am of the view that governance culture that evolved after independence has led to where we are today.”

 

“I agree to a certain level that the owner, in this case the government, needs to control business institutions it owns but the question is, to what extent? Political interference in SOEs in some instance had detrimental effects on the performance of SOEs,” he said.

 

He also raised an issue with ministers who are involved in the operations of SOEs including the appointment of board members and chief executive officers to serve their own interests.

He further alleged that ministers appoint their cronies therefore leading to mismanagement, misappropriation of funds which has often led to poor labour relations with workers and essential leading to government bail outs.

 

“You would agree with me that we as politicians are not here based on our commercial competency but on political ground where competency is not a critical success factor. I am just wondering how a politician can effectively monitor such diversity of SOEs with some of them in technical fields. I think it would be advisable to limit your involvement to defining the expected outcome, put competent board members and provide policy guidelines and get out of their ways.”

More questions posted to Jooste inquired on the failure of performance agreements at SOEs, “It is one thing to say that a performance agreement will be entered into between the minster, the board and individual members of the board, CEOs and members of senior management while it is another to ensure that a performance agreement affectively leads to performance. You may enter into a performance agreement with Trans Namib for argument sake but I can assure you that it will fail because that institution has not been fully capitalized since 1990,” he said.