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Schlettwein, Kandjoze on collision course over donation

Mon, 19 October 2015 22:17
by Villager Reporter
News Flash

The Minister of Finance Calle Schlettwein and Minister of Mines and Energy Obeth Kandjoze are on a collision course over the proposition by the latter to donate N$10 million to the Ministry of Poverty Eradication and Social Welfare.

Although the decision is still to get Parliament’s blessings, the Ministry of Mines and Energy (MME) is pushing forward with their idea of donating to the abovementioned Ministry. In a rather direct attack, Schlettwein says it is absurd for a Ministry to donate money to the State.

The donation, which was announced last week and to be handed over later this week, was still in the stage of being processed by Treasury when Mines announced its intention, without approval.

“Parliament must approve that donation. We got the information, and we are processing it, but it has not been approved,” Schlettwein told The Villager. He added that there is no gain in the State giving money to the State, without there being special circumstances.

“If an institution or a parastatal is not able to fund all its projects, then it does not make sense to donate to the one that gives you money. It is absurd. When we get these requests, we evaluate them on merit to see whether they make sense” Schlettwein charged.

Ironically, while Kandjoze is looking at donating money to the Ministry of Poverty Eradication, which receives its own substantive part of the budget, other sections of society feel the money can be betterutilised elsewhere. The major belief is that the money could be used to improve the operations of some pressing issues under the Mines Ministry, including electricity distribution and the capitalisation of some parastatals under Kandjoze.

The MME communicated to the media last week Wednesday by making its intentions clear to hand over a donation cheque in the amount of N$10 000 000 to the Ministry of Poverty Eradication and Social Welfare on 22 October this year.

Schlettwein has been caught in a crossfire with Kandjoze regarding disagreements over the Kudu gas-to-power project before.

The indecisiveness on Kudu has split options between avoiding having to drag the State into debt while funding this project, and avoiding a national black-out. Last month, Schlettwein aired his financial concerns with the funding of Kudu, and the implications it would have on State debt.

The intended donation has pushed the MME to appear as if it’s disregarding the needs of agencies operating under it, including Epangelo Mining Company (EMC), which has been struggling to be turned into a fully- fledged extracting company.

In 2012, The Villager wrote that the EMC would face difficulties in transforming from an administrative institution into an extracting company after Government refused to fund its intended expansion into mining operations.

The Government, as the principal shareholder, indicated through the line ministry that it has no intention of releasing additional funds to the SoE in the interim.

This has led the company to court foreign mining companies to form strategic partnerships to materialise its dreams. Government, however, seems to be supportive of the latter idea, which could bring in huge returns for the parastatal. Currently, there is also no legislation which prohibits the State-owned company from venturing into the lucrative mining sector.

Funding

Epangelo receives N$5m budgetary support from Government on a three-year running budget to smoothen its operations. The company says this amount is not enough to see them venture into actual mining operations.

The EMC, which recently won about 17 exploration prospecting licences (EPLs) across the mining sector, enjoys the monopoly of all strategic minerals in Namibia after they were granted sweeping control by the Government as a vehicle to increase public participation in the mining sector.

The former Minister of Mines and Energy, Isak Katali revealed then that Government had not decided to approve additional funding for the company, while a plan to that effect was not yet on the agenda.

For the year 2015/16, the EMC was only to receive N$11m as part of the Ministry of Mines and Energy’s programme for the promotion of local and foreign investment in exploration and mining activities. This was part of the N$5.3b granted to the Mines and Energy ministry over the threeyear period.

These funds were supposed to fund the Kudu gas-topower project, rural electrification and also support Epangelo Mining, the then- Minister of Finance had said. The Kudu project is still in limbo, despite the announcement of financing from government over a year ago