The announcement by Prime Minister Elijah Ngurare that government has established an 11-member task force to review governance and remuneration in Namibia’s state-owned enterprises (SOEs) has reignited a debate that has simmered for years. For some, the move represents a long-overdue intervention into a public sector plagued by uneven salary structures, weak governance and declining public confidence. For others, it is merely another commission destined to produce an excellent report that ultimately gathers dust on a government shelf.
The skepticism is understandable.
Namibia has no shortage of commissions, inquiries, task forces and policy reviews. What has often been lacking is the political will and administrative discipline to implement their recommendations.
The new task force has been mandated to conduct a comprehensive review of governance practices, executive remuneration, board remuneration, recruitment processes and human resource management across public enterprises. It is expected to report back to Cabinet within three months with recommendations aimed at creating greater consistency, accountability and efficiency across the sector.
On paper, the initiative appears timely.
Public enterprises remain central to Namibia’s economy. They manage strategic infrastructure, provide essential public services and collectively employ thousands of Namibians. Yet many have become synonymous with recurring financial losses, repeated government bailouts, boardroom instability and governance controversies.
Against that backdrop, public outrage over highly paid executives has become increasingly difficult to ignore.
Taxpayers frequently question why executives in loss-making public enterprises earn salaries significantly higher than senior public servants while their organisations continue to depend on Treasury support.
That public frustration undoubtedly influenced government’s decision.
Yet whether remuneration is truly the problem remains open to debate.
The implementation question
Former finance minister Calle Schlettwein has been among the strongest voices urging caution.
While welcoming government’s willingness to review the sector, Schlettwein argued that Namibia has travelled this road before. Salary bands, remuneration guidelines and governance reforms have previously been developed.
“The issue has never really been the recommendations,” he has argued. “It has been implementation.”
Schlettwein warned that previous attempts to regulate executive salaries were undermined when certain enterprises effectively circumvented the intended limits by moving themselves into higher remuneration categories or finding administrative ways around the restrictions. Without effective enforcement mechanisms, he cautions, another review risks producing the same outcome.)
His criticism strikes at the heart of Namibia’s governance challenge.
The country rarely struggles to identify problems.
It struggles to sustain reforms.
A symptom rather than the disease?
The debate also raises a broader question.
Are executive salaries themselves the real problem?
Or are they merely the visible symptom of deeper institutional weaknesses?
Corporate governance specialists have increasingly argued that remuneration should never be examined in isolation.
Competitive executive salaries are common internationally.
Large organisations require experienced leadership capable of managing billions of dollars in assets, thousands of employees and highly technical operations.
The private sector routinely pays substantial executive packages.
The difference is accountability.
Shareholders expect measurable returns.
Boards monitor performance closely.
Executives who consistently underperform rarely remain in office.
In many public enterprises, however, that direct relationship between pay and performance is often less obvious.
Losses accumulate.
Government guarantees increase.
Service delivery deteriorates.
Yet executive remuneration frequently remains relatively protected.
That disconnect fuels public resentment.
The issue therefore becomes less about whether executives deserve to earn high salaries and more about whether those salaries are clearly linked to measurable organisational performance.
Governance begins with boards
The task force’s mandate extends beyond salaries.
It will also review governance structures and board remuneration.
That may ultimately prove far more significant.
Boards determine organisational direction.
They appoint chief executives.
They evaluate performance.
They approve remuneration packages.
They oversee risk.
Weak boards inevitably produce weak institutions.
Several governance experts have argued that Namibia’s public enterprise reforms should begin with strengthening board appointments rather than reducing executive salaries.
Professional competence, independence and sector expertise are increasingly regarded internationally as the foundations of successful public enterprises.
If boards lack those qualities, salary reform alone is unlikely to transform organisational performance.
A poorly governed enterprise paying lower salaries remains a poorly governed enterprise.
Public confidence has eroded
Part of the skepticism surrounding the latest initiative stems from history.
Namibians have witnessed repeated cycles of reform announcements.
New policies.
New governance frameworks.
New strategic plans.
Yet many familiar problems persist.
Several SOEs continue to depend on taxpayer support while simultaneously facing recurring leadership disputes, audit concerns or operational challenges.
This history makes it difficult for the public to embrace another review with optimism.
Many citizens now judge government less by announcements and more by outcomes.
The creation of a task force, while important, is therefore only the beginning.
Its credibility will ultimately depend on what happens after the report is submitted.
The fiscal reality
The review also comes at a time when government finances remain under pressure.
Although Namibia’s economic outlook has improved through strong uranium and gold exports and continued oil and gas exploration activity, fiscal pressures remain significant.
The International Monetary Fund has recently advised Namibia to improve expenditure efficiency and reduce pressures on the public wage bill in order to strengthen public finances over the medium term. (IMF)
While SOE executive remuneration represents only a small portion of total government expenditure, it carries enormous symbolic significance.
Citizens expect prudence when public resources are constrained.
Visible disparities between executive compensation and organisational performance inevitably attract political attention.
The politics of public perception
Salary reviews also carry political value.
Few issues resonate more strongly with taxpayers than executive pay.
The image of highly paid executives leading struggling public enterprises creates an immediate emotional response.
Governments worldwide recognise this.
Reviewing remuneration demonstrates responsiveness to public concern.
Whether it addresses the structural causes of institutional underperformance is another matter.
Critics therefore argue that salary debates can sometimes distract attention from more difficult governance reforms.
Board appointments.
Political interference.
Procurement oversight.
Performance management.
Accountability systems.
These issues rarely generate dramatic headlines.
Yet they often determine whether institutions succeed or fail.
An opportunity for genuine reform
Despite widespread skepticism, dismissing the task force outright would also be premature.
Its broad mandate provides an opportunity to recommend meaningful structural reforms.
Among the issues many observers believe deserve attention are:
• Clear performance contracts for executives.
• Independent, merit-based board appointments.
• Public disclosure of remuneration linked to measurable performance indicators.
• Stronger consequences for persistent institutional underperformance.
• Uniform governance standards across public enterprises.
• Regular public reporting on implementation.
If these issues receive serious attention, the review could extend well beyond salaries.
It could become one of the most significant governance exercises undertaken in Namibia in recent years.
Reports do not reform institutions
History nevertheless offers an uncomfortable lesson.
Good reports are relatively easy to produce.
Implementation is far more difficult.
Namibia has accumulated numerous policy documents identifying governance weaknesses across public institutions.
Many recommendations have been technically sound.
Fewer have fundamentally transformed institutions.
This explains why the announcement has generated cautious optimism rather than widespread celebration.
Citizens have heard similar promises before.
They now want evidence.
The real test begins after three months
The Prime Minister’s task force will almost certainly deliver recommendations.
The quality of those recommendations will matter.
But they will not determine success.
Success will depend on whether Cabinet adopts the proposals, whether legislation is amended where necessary, whether boards are held accountable, whether remuneration becomes genuinely linked to performance and whether implementation is monitored transparently.
Without those steps, the latest review risks becoming another well-written report remembered more for its launch than for its impact.
The challenge before government is therefore larger than reviewing executive salaries.
It is restoring public confidence in the governance of Namibia’s public enterprises.
For many Namibians, the question is no longer whether government understands the problems.
It is whether government is finally prepared to solve them.
The establishment of the task force offers an opportunity to answer that question.
Whether it becomes a turning point or merely another chapter in Namibia’s long history of unfinished reforms will depend not on the report it produces, but on what government chooses to do once the report reaches Cabinet.
Kind regards
Lazarus Jacobs
Executive Director
Paragon Investment Holdings Pty Ltd
40 Eros Rd
P.O Box 11602
Eros, Windhoek, 9000
Namibia
T: 061 387 130
Email: laz@paragon.com.na
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