Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698747648438.pdf (Namibia)
REPUBLIC OF NAMIBIA BUDGET MOTIVATION BY THE HONORABLE LEON JOOSTE, Mp, MINISTER OF PUBLIC ENTERPRISES VOTE 34 NATIONAL ASSEMBLY, Thursday, 17th March 2016 Honorable Chairperson of the Whole House Committee Honourable Members, I rise to present the motivation for the budget for vote 34, Ministry of Public Enterprises.

Please allow me to take this opportunity to congratulate the Honorable Minister of Finance, the Honorable Deputy Minister and the entire staff of the Ministry for preparing the budget.
Equally, I would like to extend the same congratulations to the Honorable Minister of Economic Planning, His Deputy and staff of the National Planning Commissionfor the thorough preparation and tabling of the budget estimates for the 2016/2017-2018/2019 (MTEF)Financial years.

The budget is well balanced and focused on poverty eradication, social upliftment and overall economic development of our country.

May I now move, Hon.


Chairperson, the total budget allocation to the, Ministry of Public Enterprises for the financial 2016/2017 which amounts to .seventy-Seven Million Four Hundred and Twenty Three Thousand Namibian Dollars (NS 77 423 000.00).

This represents an increase of Forty Seven Million Eight Hundred and Thirty Four Thousand Namibian Dollars (NS 47 834 000) or 62% increase from the 2015/2016 allocation.
it to, once again, remind this As an introduction, august house that the mandate of my Ministry is lito position Namibia's key public enterprises to play their meaningful role in the country's developmental agenda".

is important Public Enterprises, in Namibia, represent a combined asset value of .

:!:.

N$40 billion (plus minus forty billion Namibian dollars), and the number of Public Enterprises continue to increase (97 PEsto date).
The role of Public Enterprises in the Namibian economy is absolutely cardinal and the reform of this sector is paramount to maintain sustainable economic growth.

The Ministry of Public Enterprises was therefore created to steer the reform process.

1 Honourable Chairperson of the whole house Committee, the Ministry was going to I informed this August House last year that consolidate and unpack the mandate given to us.
I am glad to inform you that a number of achievements have been recorded, notably: • Amendment to the SOEAct, Act No.
2 of 2006 • Creation of additional posts to the establishment • Approval of the Corporate Advisory Reform Unity (CARU) • Drafting of the Ministerial Strategic Plan • Consultation of Key Stakeholders on the approved Central Governance Model • Conducting of necessary studies and Global benchmarking • Approval of comprehensive Principals, Policy Frameworks and Directives for Public Enterprises in Namibia • Creation of Database for Potential Board members for Public Enterprises • Completion of Terms of Reference for the Performance Monitoring and Evaluation Framework • Finalization of the new Governance Model for Namibian Public Enterprises • Training of Board members The Ministry of Public Enterprises is however still in the process of consolidating on the afore stated notable achievements by ensuring that Public Enterprises are placed in a position where they are well managed and no longer present a financial burden to the State.
In addressing that anomaly, my Ministry continues to strengthen the following aspects: ~ The finalization of the establishment of I explained the purpose of Reform Unit.

year's budget statement and I am confident that provide the Ministry with the required technical the dramatically Shareholder.
effectiveness enhance of the Corporate Advisory this unit during last this unit will capacity to as the State 2 ~ The Ministerial Strategic Plan will be finalized before the end of this month and this operational document will in turn guide us towards the finalization of the optimal structure for the Ministry.

I am committed to a lean and mean structure for the Ministry of Public Enterprises and I am confident that we will be able to implement our complex mandate with a small, skilled staff component.
~ The revision of legislation at the Ministerial and Public Enterprise in order to align the legislation to our mandate and to level, addresscertain anomalies that currently exist.

~ Capacity building at Ministry and Public Enterprise levels, particularly, Public Enterprises Boardsof Directors.
The Ministry has together with NIPAM formulated an induction course for Board members and I am happy to say that all newly appointed Board members participate in a compulsory induction course before they participate in the formal activities of the respective Boards.

Various other targeted courses will also be offered throughout the year to coach Board members on principles of corporate governance, leadership and other related matters.
~ Housing of the Public Enterprises information database at one single centralized point to support Government decision-making large is desirable and the Ministry has managed to gather amounts of information and data from the PEs.

~ High emphasis will be placed on performance management systems and processes for Public Enterprises, their Boards and Management.

to concretize the delivery of the above aspects, the In order Ministry is currently finalizing the Strategic Plan for 2016/2017 - 2020/2021.
This is a five years Strategic Plan which outlines key targets, outputs and the required resourcesto strategic objectives, realize those strategic objectives.

Equally, during the period under review, my Ministry has assessed the skills and technical capacity, required for the implementation of the identified deliverables; now and in the future.

The Ministry will continue to enhance the capacity as the time goes on and the need arise.
3 Honourable Chairperson, the rationale behind the creation of During my inaugural budget speech, last year, I informed this August House that the Ministry of from the way we Public Enterprises was to provide a major shift have been doing business with regard to the Public Enterprise Sector.

the Ministry has undertaken to embark on the following major initiatives: In this regard, therefore, .

:.

EnhanceGood Corporate Governance .

:.

Empower Public Enterprises .

:.


Transform Organizational Culture and Leadership .

:.

Ensurea Competent Ministerial Workforce .

:.

EnsureAdequate Funding and utilization of Resources Through the above objectives, the Government of the Republic of Namibia, will, without doubt, be able to properly approach major programs that are aimed at improving the lives of our citizens.
These are, for example: ./ Poverty eradication: Through proper monitoring of programs of improve, with the intention of PEs, financial performance will making some PEs financially self-reliant.

This will relieve the financial burden on the Treasury with Government constantly bailing out PEs.

Once this is achieved, the Government will be able to divert these funds to many other priorities earmarked for In the same vein, well performing PEswill poverty eradication.
be paying dividends to Government, and, in this regard, empower Government to fight poverty.

The Ministry of Public Enterprises is also going to facilitate the first Poverty Eradication strategy for Namibian Public Enterprises.

The fact is that many Public Enterprises have a role to play in the fight against poverty in our country and the Ministry of Public Enterprises will facilitate the formulation of such a strategy together with the Ministry of Poverty Eradication and Social Welfare.
4 ./ Industrialization: infrastructure development/investment will enhance self-reliance and sustainable growth.

Through economic PEs, we will support in our country, and this • Ensure specialized skills development in PEs, to support industrialization.

• Craft policies and advocating business expansion for well performing PEs.

./ Employment creation: encouraging well performing PEsto apply growth strategies and thereby, creating additional employment opportunities .
./ Economicgrowth/wealth creation: supporting the fulfillment of the implementation of economic growth in the PEssector.

Improving the balance sheet of PEs,as a base for wealth creation.

In order to ensure that we, as a country, do not addressthe new mandate given to the Ministry in isolation, I have visited a number of countries with a view to learning from their experiences in the management and reform of public enterprises.
All the countries I visited have either adopted a centralized governance model or are in the process of migrating towards a centralized governance the benchmarking missions, the Ministry model.

To complement continues to undertake desktop studies.

We are, therefore, is required from us by our confident Government, namely, to enable our public enterprises, especially the commercial ones, to compete globally.
that we will deliver what 5 Honorable Chairperson, Honourable Members to embrace the "Harambee Our Ministry has indeed positioned itself that our President will unveil during the for Prosperity Project" State of the Nation address in order to accelerate development and fast track measures essential for prosperity, economic development regard our and the fight against poverty, and inequality.
Ministry is in the process of identifying a number of high priority Commercial Public Enterprises to champion this effort and to then to facilitate endow them with a degree of "preferential the intentions of this special project.

I shall report progress in this regard at an opportune time.

treatment" In that May I also, at this juncture, express my appreciation to this august house, for the support in the amendment of the SOEGAct, which is now amended to the Public Enterprises Act, Act No.8 of 2015.
This Act has enabled us to achieve commendable milestones.

However, while we have amended that Act, be major amendments required to this Act and the establishing Acts of various Public Enterprises.

This legislative review is ongoing and aimed and various to synchronize the accommodate the governance reforms.

there may still layers of legislation Honorable Chairperson, the budgetary allocations to Let me now reflect on the details of Vote 34 for the 2016/2017 fiscal year.
The activities in our Ministry are grouped under two main programs: 1.

Supervision, Coordination and Support Services 2.

Legal and Economic Advisory Services Program 1: Supervision, Coordination and Support Services An amount of Forty-Two Million Six Hundred and Thirty-Six Thousand Namibian Dollars (NS 42 636 000) has been allocated to this program.
This program consist of two main components, namely Administration or Coordination and Support Services and Managerial oversight and the Corporate Advisory Reform Unit , 6 Under this, we intend to: - Support the public enterprises transformation, which will provide the Ministry with financial, human resource management, legal and corporate governance frameworks.
Under this activity the research and development based on Ministry will inform the Ministry international best practices, the research will the In addition, of research will lead to the development of a clear strategic plan, streamline and review corporate governance guidelines and establish further common policy frameworks and directives.

the medium and long term transformation.


conduct - Supervision and coordination of the Ministry of Public Enterprises render support services that include human resources, auxiliary, financial, computerized information systems, public relations and reviewed financial reports and performance agreements in public enterprises.

- To provide guidance, capacity building, human and financial resources as well as auxiliary services to both internal and external stakeholders of the Ministry of Public Enterprises.
Program 2: Legal and Economic Advisory Services An amount of Thirty-Four Million Seven Hundred and Eight Seven Thousand Namibian Dollars (NS 34 787 000.00) has been allocated two main to this components, namely Legal, economic and governance advisory Services.

programme.

This programme consist of Under this, we intend to: - To review legal frameworks of PEs - Review of Public Enterprises financial and performance reporting system.
- Maintaining and safe keeping of computerised information systems and improve MPE'spublic image.

- Establish and further develop generally accepted policy frameworks, directives and good practices, governing the PE Sector, 7 - Develop a framework for monitoring and evaluating performance governance and to agreements, performance agreements and remuneration levels.
directives formulate relation to in - Source an appropriate IT based product to evaluate strategic and economic performance of all Public Enterprises in real-time.

for 2016/2017 Financial Year, the Ministry is Four amount of Seventy Seven Million In terms of allocation, requesting the total Hundred and twenty Three Thousand Namibian Dollars (N$ 77 423 000.00).
total amount of N$ 77 423 that Out of 000.00, a total amount of N$ 42 636 000.00 is allocated to Program 1, while N$ 34 787000.00 is allocated to Program 2.

In summary, this allocations stagger along the following lines; this total amount of N$ 42 636 000.00, a large amount Program 1: N$ 42 636 000.00, Out of allocated for the Ministry's personnel and operational expenditure, travel and subsistence allowance, general administration, furniture, office rental, conferences utilities and transport.
is Program 2: N$ 34 787000.00, An allocation of N$ 24 320 000.00 to this program is allocated for goods and services to cater for for example the synchronization of the PE Governance Amendment Act to the establishing Acts of PEs.

short-term consultancies the funds, N$ 10 467 000.00, will cater and subsistence allowance, for personnel general The rest of expenditure, administration and logistics.

NB: The Ministry expenditure at the moment.


travel does not have any capital/development 8 I believe the task that has been given to my Ministry is of importance to the development of our economy as fundamental well as to the advancement of the living standard of our people and deserves the support of every Namibian and all stakeholders.
We the honor bestowed onto us by our have resolved to respect Government and we have declared to deliver the service to the people of our country to the best of our ability.

Honorable Chairperson, the members of this house and our Nation are I am aware that the status of Namibian Public anxious for an improvement of I personally share this sense of Enterprises.
I want to declare that urgency but also that I have committed to follow a very calculated, coordinated path towards the reform of our Public Enterprises.

There is a certain sequence of events that has to be followed and the last thing I will allow is for unnecessary, potentially expensive mistakes to be made by rushing into unproven solutions.

The decisions we take must always be guided by fact.
The first year after the birth of the Ministry of Public Enterprises was productively used to prepare for implementation and my expectation is that 2016 will be remembered as the year where our strategy for the comprehensive reform of Namibia's Public Enterprises will be exposed.

We will implement an entirely new Governance Model for Namibia's Public Enterprises and wide-ranging restructuring of Public Enterprises will be implemented once thoroughly evaluated and approved by Cabinet.
The forms of restructuring to be proposed potentially include the merging of certain PEs,the re-absorption of listing of certain PEson certain PEsinto Line Ministries, the partial the Namibian Stock Exchange and the possibility of more participation from strategic partners.
All forms of restructuring will follow a clearly defined and calculated process and will only be approved once we are convinced that it will enhance the efficiency and effectiveness of an entity, or the delivery of services to the benefit of the Nation.

The public and the members of this august house will be informed of the systematic implementation of these .

reforms in due time.


9 As I conclude I wish to thank the members of this August House for their support and interest in our Ministry and I want to in particular thank His Excellency The President, The Vice President, The Right Honorable Prime Minister and my dear colleagues who make up the Executive for through reform Namibia's Public uncharted territory.

this I want Enterprises.

respected House in advance for the overwhelming support for Vote 34.
Together we shall to thank the Honorable Members of their patience and support as we steer I thank you.

Leon Jooste, MP (Minister) 10