Namibia set to link SOE payments to performance in 2024

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SOE payments
SOE payments

Namibia’s Ministry of Finance and Public Enterprises (MFPE) announced Wednesday that all state-owned enterprises (SOEs) will be required to adopt a performance management system linking remuneration to performance starting in 2024, with the goal of enhancing accountability and fostering performance-driven governance.

MFPE Minister Iipumbu Shiimi said in a statement that the ministry is developing an integrated system, starting with commercial SOEs on April 1, 2024, with plans to extend to others.

“Some of our SOEs are performing badly and failing to deliver the critical service they were created to perform. We must be frank and talk openly about the poor performance of these entities and must find solutions as a matter of urgency,” he said.

According to Shiimi, poorly performing SOEs grapple with challenges like substantial losses, high wage bills exceeding 55 percent of revenue on average, as well as uncontrollable expenditure, noncompliance, poor performance, service delivery issues, internal conflicts, and unethical conduct.

Shiimi said urgent interventions are therefore needed to reform SOEs’ portfolio, adding that moving forward, the focus will include reviewing and validating the integrated business plans of SOEs, with an emphasis on ensuring that every commercial entity has an integrated business plan.

He said SOEs will also be required to submit biannual reports on key performance indicators progress to the Ministry of Finance and Public Enterprises.

In the last five years, the country has pursued crucial reforms, including the approval of a hybrid governance model, as well as implementing an online board recruitment system and revising the SOEs’ business plans for relevance and sustainability, he said.

Namibia owns 81 public enterprises with an employment count of around 25,000, according to the ministry.

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