IPPR Public Enterprise Governance Rankings 2021

Otis Daniels_Finck
The year 2020 was an exceptionally difficult year as Covid disrupted the entire economy and this needs to be borne in mind when assessing the performance of commercial public enterprises.

1. NamPower: This year NamPower is one of our three top-ranked public enterprises scoring highly across all criteria although it was slower to publish its annual report. The company is a well-run genuinely commercial operation contributing to the fiscus and investing for the future while providing plenty of information to the public. Questions can be asked about the years it spent chasing prestige projects and the lack of significant new generating capacity this produced before fully embracing the IPP concept and also renewable sources of energy. However, NamPower is essentially a monopoly whose prices are regulated by the Electricity Control Board. Provided the ECB agrees, it is therefore always possible to raise prices, make profits and pay taxes and dividends.

2. MTC: MTC scores well across all criteria but is a little slow to publish its latest annual report. There is no question that the company is currently well-run but it now dominates Namibia’s small market leaving little room for growth and rendering it effectively a monopoly. The real question is whether a state-owned monopoly represents the best way of providing competitively priced and innovative telecoms services to Namibians and whether selling off a share to private shareholders is a good idea given the current lack of competition. A better approach may be to nurture two or more dynamic private sector players and ensure they compete on a level playing field.

3. NamPost: NamPost scores well across most criteria but is a little slow to publish its annual report. It is a well-run and uncontroversial commercial operation generating modest profits and providing an important service to key communities.

4. NamPort: NamPort is also late with its annual report so it is hard to assess its most recent financial performance. The process of appointing a new MD appears to have gone smoothly. Its African record for reefer transfers achieved in 2020 provided good publicity for the new container port which will have to prove itself as a commercially sound investment.

5. Namdia: Namdia scores highly across most criteria but falls short of scoring more highly because important questions remain about past under-pricing of diamonds. It is not known what the outcome of the report of the public enterprises minister to the president on this issue is and important questions remain not only about the way the company is run but also its fundamental role given it seems to be drifting into diamond cutting and polishing as all the while its margins decline.

6. Roads Authority: Perhaps rightly, the Roads Authority claims it is not really a commercial public enterprise in the same way as others because it was not established to generate profits and pay dividends. Nevertheless, we believe it is important to monitor its performance as it plays a crucial role in the Namibian economy. During 2020 it improved the amount of information available to outsiders and also gains from no reported incidents of mismanagement or corruption.

7. Namibia Wildlife Resorts: NWR has also gone through a difficult period with senior management but 2020 saw a new MD appointed. The company made a modest profit in FY 18/19 and has made great efforts to provide the public with more information on its operations which is to be welcomed. Covid has dealt a harsh blow to Namibia’s entire tourism sector and NWR is no exception but unlike private businesses it has been able to rely on a significant transfer from the national budget to survive.

8. Namibia Airports Company: Under a new CEO, the NAC has experienced no reported instances of mismanagement or corruption and pushed ahead with the expansion of Hosea Kutako International Airport. It continues to provide very little information and by the end of 2020 its last publicly available Annual Report was from FY15/16.

9. Meat Corporation of Namibia: Meatco continues to score well for the timely publication of its annual report and the provision of information on its operations. Its role in marketing Namibian beef to China and the US is commendable. However, as its auditors point out, it is in desperate need of a strategy which will render it financially sustainable over the longer term.

10. Telecom Namibia: Telecom has gone through a turbulent few years but has a new CEO and board. Whether it can find a profitable role for itself in Namibia’s small telecoms market competing against MTC and private-sector players remains to be seen.

11. Fishcor: Fishcor’s ranking is only due to financial performance achieved some years ago which we continue to rely on given the lack of alternative information. It is far from clear whether changes to management and governance introduced in 2020 will put the company on a firm footing.

12. Namcor: The lack of more up-to-date information prevents Namcor from scoring more highly than it does. Again, it is hard to assess what the outcome is of important investigations into questionable incidents and what if any action has been taken to address them.

13. TransNamib: TransNamib continues to score poorly although the amount of public information about the condition of the company improved in 2020. Reports about senior management and the board continue to swirl as regularly as ever and there is little sign of the new business plan being implemented.

14. Epangelo Mining Company: In the past year Epangelo has made an effort to share more information with the public. Nevertheless, it has never paid tax or dividends to Government but has rather depended on transfers from the National Budget. It is hard to see what value it adds to the national economy.

15. Lüderitz Waterfront Company: Given the dearth of information, points can only be awarded for the fact that no instances of management instability, mismanagement or corruption come to light in 2020 although the complaints lodged with the Anti-Corruption Commission in 2018 appear to have come to nothing. The High-Level Panel on the Namibian Economy recommended Government divest itself of the company which is a polite way of saying it should be liquidated.

16. NIDA: The almost complete lack of public information on NIDA means it scores badly on almost all criteria and the dismissal of its board for dishonesty by the minister of public enterprises represented a huge blow to a new institution.

17. Air Namibia: Air Namibia failed to publish an annual report for well over a decade. Despite this lack of information, the company clearly made consistent losses and therefore failed to pay taxes or dividends to government, requiring instead sizeable transfers from the national budget as well as loan guarantees in order to continue to operate. Senior managers with little or no experience of the airline industry continue to be appointed and unexpected changes in both the company board and senior management have taken place throughout the past year. The only positive thing that can be said is that no serious cases of corruption came to light in 2020. The company was formally liquidated on 26 March 2021 and will not feature in our rankings henceforth.

18. Henties Bay Waterfront: Given the dearth of information, the only positive thing that can be said is that no instances of management instability, mismanagement or corruption have come to light in the past year.

19. Zambezi Waterfront: Very little information is available on the Zambezi Waterfront but the issue of missing money does not appear to have been resolved. The High-Level Panel on the Namibian Economy recommended government divest itself of the company which was a polite way of saying it should be liquidated.

20. Roads Contractor Company: With no public information available on its financial performance over many years, the Roads Contractor Company scores poorly across all criteria. The company continues to require significant subsidies from the national budget and there appears to be little sign it will either be transformed into a genuine commercial enterprise or liquidated. The High-Level Panel on the Namibian Economy recommended Government divest itself of the company which was a polite way of saying it should be liquidated.