Wither and survive or die? An analysis of public enterprises in Namibia

Ralph Marenga

doi:10.24294/jipd9758

Home - JIPD - Volume 8 - Issue 13

Submit to JIPD

Journal Browser

Volume | Year

Issue

• Current lssue

View All

News and Announcements

View All

Wither and survive or die? An analysis of public enterprises in Namibia

Ralph Marenga

Journal of Infrastructure Policy and Development 2024, 8(13), 9758; https://doi.org/10.24294/jipd9758

Submitted：20 Oct 2024

Accepted：04 Nov 2024

Published：12 Nov 2024

Download PDF(352.80KB)

XML

Abstract

The performance of Public Enterprises (PEs) in Namibia has been a long and contentious issue, clamored by continuous bailouts in the face of constant poor performance. The trend of financial bailouts to PEs in Namibia over the years has attracted increased attention into the dynamics of poor PE performance and their fiscal burden on the state. The Namibian government has taken active steps in cutting on PE bailouts and demanding improved performance or face closure. By looking at recent developments in the governance of PEs in Namibia, the purpose and objective of the current study is to analyze whether the current stance and trajectory of government decisions spells a post-honeymoon period in which poor performing PEs will ‘wither and survive or die’ if they do not improve their sustainability index by not relying on financial bailouts. This analysis is aided by the insights provided by the stakeholder, institutional and principal-agent theories. Through the qualitative research method, this study finds that the Namibian government has taken a new attitude and approach in which it will no longer blindly accept and tolerate the poor performance of PEs through continuous bailouts as seen in the past. PEs that are withering will now either survive (through reforms) or die (through liquidation or dissolution).

Keywords

References

Alberts, E. (2023). Let state-owned enterprises drive growth of economy. The Namibian, 13 November 2023.

Aldhaheri, A. (2024). A study of the impact education level has on unemployment rates for youths in emerging market countries. Rochester Institute of Technology.

Angula, V. (2024). Nampost bank finally goes digital. Available online: https://omutumwa.com/2024/10/nampost-bank-finally-goes-digital/ (accessed on 2 November 2024).

Baker, R. M. (2019). The agency of the principal-agent relationship: An opportunity for HRD. Advances in Developing Human Resources, 21(3), 303-318. https://doi.org/10.1177/1523422319851274

Bank of Namibia. (2024). Economic outlook update. Bank of Namibia.

Baum, A., Paulo, A. M., Alberto, S., & Mouhamadou, S. (2021). How to assess fiscal risks from state-owned enterprises: benchmarking and stress testing. Available online: https://www.imf.org/en/Publications/Fiscal-Affairs-Department-How-To-Notes/Issues/2021/08/18/How-to-Assess-Fiscal-Risks-from-State-Owned-Enterprises-463616 (accessed on 25 September 2024).

Boamah, F., & Williams, A. (2019). ‘Kenyapowerless’ – Corruption in electricity as ‘problem-solving’ in Kenya’s periphery. U4 Brief.

Brandt, E. (2018). Ithete sounds warning to non-performing SOEs ... As Namibre declares n$5 million dividends. New Era, 22 February 2018.

Brownell, J., Pandit, K., Smith, M., & Weiland, N. (2021). Combating unemployment in Namibia by expanding donor support for MSR. Worcester Polytechnic Institute.

Chiringa, K. (2021). Air Namibia Liquidation... Mclaren, Bruni Given Sweeping Powers. Available online: https://www.eaglefm.com.na/news/air-namibia-liquidationmclaren-bruni-given-sweeping-powers/ (accessed on 3 July 2024).

de Visser, J., & Waterhouse, S. (2020). SOE boards and democracy. University of Western Cape.

Dione, O. (2021). Why Ethiopia needs to open its telecom market. Available online: https://blogs.worldbank.org/en/africacan/why-ethiopia-needs-open-its-telecom-market (accessed on 2 November, 2024).

Duddy, J. (2022). Derailing private sector. Windhoek Express, 13 July 2022.

Duddy, J. (2023). Power struggle. Windhoek Express, 9 August 2023.

Harris, J., Imbert, B., Medas, P., Ralyea, J., & Singh, A. (2020). Government support to state-owned enterprises: Options for sub-Saharan Africa. Available online: https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.imf.org/-/media/Files/Publications/covid19-special-notes/enspecial-series-on-covid19government-support-to-stateowned-enterprises-options-for-subsaharan-afric.ashx&ved=2ahUKEwiAw (accessed 25 September 2024).

Hattke, F., & Vogel, R. (2023). Theories and theorising in public administration: A systemic review. Public Administration Review, 83(6), pp. 1542-1563. https://doi.org/10.1111/puar.13730

Institute for Public Policy Research. (2023). Namibia quarterly economic review Q4 2023. Institute for Public Policy Research.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behaviour, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360. https://doi.org/10.1016/0304-405X(76)90026-X

Kariseb, K. (2024). Leveraging and regulating pension funds for sustainable development and socially responsive investments in the Namibian economy. In: Engstrom,V., Mustaniemi-Laakso, M., Stark, L. (editors). Social Justice Innovation in Africa (pp. 187-202). Routledge.

Kato, R. L. (2021). Pressed by losses and debt, Namibia’s national airline folds. Available online: https://www.africanews.com/2021/02/11/pressed-by-losses-and-debt-namibia-s-national-airline-folds// (accessed on 24 September 2024).

Keyter, C. (2006). Institutional reform measures within the Namibian public sector to ensure accelerated service delivery. In: Journal of Public Administration Conference Proceedings; September 2006; pp. 119-130.

Limbo, C. M. (2019). An analysis of the performance of state-owned enterprises in Namibia: Case studies in the transport sector. [Masters thesis]. Stellenbosch University.

Mahajan, R., Lim, W. M., Sareen, M., Kumar, S., & Panwar, R. (2023). Stakeholder theory. Journal of Business Research, 166, 1-16. https://doi.org/10.1016/j.jbusres.2023.114104

Mare, H., & Kandjungu, M. (2020). No bailouts for SOEs. Confidente, 16 July 2020.

Marenga, R. V. (2020). Analysing the performance of public enterprises in Namibia: A challenge for the practice of public administration? Journal of Governance and Regulation, 9(3), 96-109. https://doi.org/10.22495/jgrv9i3art7

Marenga, R., & Kakujaha-Matundu, O. (2019). Sustainable development and corporate social responsibilities of foreign investors in Namibia: Is there a need for a mercantile refocus? Journal of International Business and Economics, 7(2), 82-94. http://dx.doi.org/10.15640/jibe.v7n2a8

Maurihungirire, M. (2016). An analysis of the financial performance of state-owned enterprises: A case study of Transnamib [Masters thesis]. University of Namibia.

Mbathera, E., & Ngatjiheue, C. (2021). Jooste frustrated with poor SOE governance. The Namibian, 22 November 2021.

Menges, W. (2024). Court refers looting of SME bank to PG. The Namibian, 14 March 2024.

Mobile Telecommunications. (2022). CSI impact report. Mobile Telecommunications.

Mongudhi, T. (2023). NamPower board chairperson threatens to quit over political interference. The Namibian, 6 July 2023.

Mthombeni, A., Obert, S., Juet, N., Bronson, M., & Sydney, M. (2023). Challenges and prescriptions to corporate governance issues facing state-owned enterprises (SOEs): A Zimbabwean perspective. Indonesian Journal of Innovation and Applied Sciences (IJIAS), 3(3), 252-263. https://doi.org/10.47540/ijias.v3i3.985

Mulama, L., & Nambinga, V. (2018). Namibia’s untapped resource: Analysing youth unemployment. National Planning Commission.

Muller, M. (2023). Load Shedding as a result of failures at the political-technological interface. South African Journal of Science, 119(9-10), 1-5. https://doi.org/10.17159/sajs.2023/16595

Mumbuu, E. (2022). Report recommends action against Transnamib executives. New Era, 21 November 2022.

Musa, B. (2022). The public sector in Nigeria: An exploration of the role of Nigerian National Petroleum Corporation (NNPC). Eurasian Journal of Management and Social Sciences, 3(2), 40-48. https://ejmss.tiu.edu.iq/volume-3-issue-2-article-4/

Namibia Press Agency. (2021). Cabinet to decide on Agribusdev’s fate: Jooste. Namibia News Digest, 2 August 2021.

Namibia Statistics Agency. (2019). Namibia labour force survey 2018 report. Namibia Statistics Agency.

Namibia Statistics Agency. (2024). Latest statistics. Available online: https://nsa.org.na/ (accessed on 24 September 2024).

Namibian Broadcasting Corporation. (2021). Public enterprise minister stresses that Namibian SOEs should comply with corporate governance. Available online: https://nbcnews.na/news/public-enterprise-minister-stresses-namibian-soes-should-comply-corporate-governance.45865 (accessed on 27 September 2024).

Namibian Sun. (2023). Nampower political interference dangerous. Namibian Sun, 8 June 2023.

National Planning Commission. (2024). Namibia - national policy interventions: A rapid cost-benefit assessment. National Planning Commission.

Nautwima, J. P., & Asa, A. R. (2021). The relationship between inflation and unemployment in Namibia within the framework of the Phillips curve. International Journal of Innovation and Economic Development, 7(6), 7-16. http://dx.doi.org/10.18775/ijied.1849-7551-7020.2015.75.2001

Ndjavera, M. (2022). Namibia tackles double digit youth unemployment. New Era, 21 June 2022.

Ndjavera, M. (2023). Shiimi: SOEs clamour for bailouts every day. New Era, 31 October 2023.

Nederman, M. (2023). Planning, the problem or the solution? A study of informal settlements in Namibia and the complexities of planning in an informal context. Blekinge Institute of Technology.

New Era. (2021). Jooste warns SOEs honeymoon is over. New Era, 4 June 2021.

Nyasa Times. (2024). Malawi: Prolonged power blackouts returns, ESCOM blames supply-demand mismatch amid rising demand. Available online: https://allafrica.com/stories/202410140295.html (accessed on 2 November 2024).

Nyirubutama, J. P. (2016). Rwandan connectivity gains a lift up. Available online: https://www.theworldfolio.com/interviews/rwandan-connectivity/4157/ (accessed on 2 November 2024).

Ochurub, M., & Jeremiah, A. (2021). Assessing operational efficiency and the use of strategic capabilities in the rail transport industry in Namibia. Namibian Journal for Research, Science and Technology, 3(2), 9-18. https://doi.org/10.54421/njrst.v3i2.56

Organisation for Economic Co-operation and Development. (2024). Recommendation of the council on guidelines on corporate governance of state-owned enterprises. Organisation for Economic Co-operation and Development.

Petersen, S. (2023). Nearly 50% of population living in poverty, says PM. The Namibian, 25 June 2023.

Petersen, S. (2024). Higher education SOEs to cost N$4,4b in one year. The Namibian, 9 April 2024.

Phaladi, M. P. (2021). Framework for integrating knowledge management and human resource management for the reduction of knowledge loss in selected South African state-owned enterprises [PHD thesis]. University of South Africa.

Pharatlhatlhe, K., & Bruce, B. (2019). Youth unemployment and the role of regional organisations: The case of the Southern African Development Community (SADC). The European Centre for Development Policy Management.

Poyago-Theotoky, J. (2024). Mixed oligopoly and public enterprises. Cambridge University Press.

Prinsloo, H. (2021). Cabinet scorecards 2020-2021. Namibian Sun, 19 March 2021.

Republic of Namibia. (1990). Namibian constitution. Government Printers.

Republic of Namibia. (2019). Public enterprises governance act (Act no. 1 of 2019). Government Printers.

Republic of Namibia. (2022). Namibia. Available online: https://sdgs.un.org/sites/default/files/2022-11/NAMIBIA%20inputs.pdf (accessed on 2 November 2024).

Republic of Namibia. (2023). Final draft of the public enterprises ownership policy of the Namibian state. Government Printers.

Sayegh, A. (2019). Analysing and assessing risks from SOEs. International Monetary Fund.

Schwarting, G. (2013). Public corporate governance codes: Necessary but successful too? Administrative Culture, 14(1), 145-157.

Sherbourne, R. (2024). Namibia’s national budget 2024/25: Benefiting from the fruits of growth. Institute for Public Policy Research and Hanns Seidel Foundation.

Shihepo, T. (2024). Namcor gets N$1.2b govt bailout. The Namibian, 15 May 2024.

Shipena, J. (2023). SOEs bailouts impacting social investments, says Shiimi. The Villager, 1 November 2023.

Silva, L. C., Macedo, I. M., & Thompson, M. (2024). Revisiting the debate on institutions, the state and institutional change: The relevance of institutional theory to public administration teaching. Teaching Public Administration, 42(1), 73-94. https://doi.org/10.1177/01447394231159985

Smith, J. (2017). Mother of all bailouts. Republikein, 4 October 2017.

Syrett, S., & Bertotti, M. (2012). Reconsidering private sector engagement in subnational economic governance. Environment and Planning A: Economy and Space, 44(10), 2310-2326. https://doi.org/10.1068/a44675

Tafirenyika, T. (2024). Govt freezes agronomic board executive salaries. The Namibian, 6 June 2024.

Tendane, S. (2023). Namibia remains second most unequal country globally. The Namibian, 31 August 2023.

Tendane, S., Hartman, A., & Alberts, E. (2023). Police unleash force on unemployed youth. The Namibian, 23 March 2023.

The Namibian. (2019). Bailouts should not be the norm. The Namibian, 31 July 2019.

The Namibian. (2021). Air Namibia: It’s now or never. The Namibian, 12 February 2021.

Thomas, A. (2012). Governance at South African state-owned enterprises: What do annual reports and print media tell us? Social Responsibility Journal, 8(4), 448-470. https://doi.org/10.1108/17471111211272057

Tjitemisa, K. (2019). SOEs trapped in N$43 billion debt. New Era, 30 April 2019.

Tlhage, O. (2018). Embattled RCC ‘captured’ by Chinese. Namibian Sun, 16 May 2018.

Trumpet News. (2018). New report details 11 reasons why Uganda Airlines could fail to fly. Available online: https://trumpetnews.co.ug/2018/07/24/new-report-details-11-reasons-why-uganda-airlines-could-fail-to-fly/ (accessed on 2 November 2024).

Tshuuya, L. (2023). Namibians have a right to good corporate governance at SOEs. The Namibian, 1 August 2023.

Twesigye, P. (2022). Structural, governance, & regulatory incentives for improved utility performance: A comparative analysis of electric utilities in Tanzania, Kenya, and Uganda. Utilities Policy, 79. https://doi.org/10.1016/j.jup.2022.101419

Uugwanga, A. N., Qutieshat, A., & Mpundu, M. (2024). Framework for the provision of affordable housing: Addressing the housing crisis in Namibia. ISAR Journal of Economics and Business Management, 2(2), 18-28.

van Zweiten, K., Eidenmuller, H., & Sussman, O. (2020). Bail-outs and bail-ins are better than bankruptcy: A comparative assessment of public policy responses to covid-19 distress. Virginia Law & Business Review, 15(2). https://dx.doi.org/10.2139/ssrn.3669541

Walumweya, M., & Phiri, J. (2022). Adopt effective competitive strategies in response to environmental challenges for national public broadcasting corporation in developing countries: A participatory approach. Open Journal of Business and Management, 10, 175-191. https://doi.org/10.4236/ojbm.2022.101011

Weylandt, M. (2016). SOE governance in Namibia: Will a hybrid system work? Institute for Public Policy Research and Hanns Seidel Foundation.

Xinhua. (2018). Namibia’s loss-making public enterprises gobble 1 bln USD gov’t bailout. Available online: http://www.xinhuanet.com/english/2018-02/26/c_137001306.htm (accessed on 2 July 2024).

Xinhua. (2019). Namibian Gov’t Turns Down 136 mln USD Bailout Request from Air Namibia. Available online: http://www.xinhuanet.com/english/2019-10/23/c_138496545.htm (accessed on 2 July 2024).

Xinhua. (2023). Namibia to Link SOE Payment to Performance in 2024. Available online: https://english.news.cn/20231123/5ba67b22ec1d4276968f08fedae9de1b/c.html (accessed on 2 July 2024).

Ye, S., Zeng, J., Liao, F., & Huang, J. (2021). Policy burden of state-owned enterprises and efficiency of credit resource allocation: Evidence from China. Sage Open, 11(1). https://doi.org/10.1177/21582440211005467

Previous
article in this issue

Next
article in this issue