Ester Mbathera
The Ministry of Finance and Public Enterprises (MFPE) has clarified its stance on the appointment and extension of contracts for chief executives in state-owned enterprises who have reached or surpassed the age of 60.
Among the senior CEOs is Social Security Commission head, Milka Mungunda, who is 64 years old. Her contract was extended in 2021 when she had just turned 61.
The appointment of the governor of the Bank of Namibia, Johannes !Gawaxab was also questioned when he was appointed in 2020 at the age of 64.
The latest appointment is that of TransNamib’s CEO, Desmond van Jaarsveld, who is turning 61 in December.
The ministry’s spokesperson, Johnathan Swartz, said that these extensions and appointments are strictly merit-based and follow a rigorous evaluation process.
“CEOs and managing directors of public enterprises are appointed on a contractual basis, with an option for renewal based on their performance. In certain exceptional cases, where a public enterprise lacks a comprehensive succession plan, CEOs who have demonstrated exceptional performance may receive contract extensions beyond the age of 60,” he said.
According to Swartz, the ministry is concerned with the employment of CEOs and MDs who are nearing or have passed the age of 60.
The Labour Act currently sets the retirement age at 60, with provisions for early retirement from 55 to 59.
Swartz said the situation for CEOs and MDs of public enterprises is distinct.
“This approach ensures that the leadership of public enterprises remains in the hands of individuals with proven expertise and a track record of effective performance, thereby safeguarding the stability and success of these enterprises. The ministry remains committed to leveraging experience and skill while ensuring robust performance standards and accountability,” he said.
According to the Public Enterprises Governance Act (PEGA) of 2019, the ministry is responsible for appointing board members for public enterprises.
Swarts said these boards subsequently appoint competent leaders of the enterprise based on performance-based contracts lasting five years.
“These contracts come with specific deliverables and clear directives for the appointed CEOs and MDs, who must also sign performance agreements with their respective boards,” he said.
The SSC was accused of adjusting policies to extend Mungunda’s employment contract despite her reaching retirement age.
The board chairperson at the time, Dawid/Uirab, explained that the Commission was at a point of implementing critical strategic business enterprise, customer-centric, and digital business systems, which the board didn’t want to change hands at the time.
According to him, all fixed-term employees of the SSC may work until the age of 65, as they are not limited by any pension fund rules.
TransNamib’s executive and chairperson, Theo Mberirua, did not respond to questions sent to them by the time of going to print.
Labour expert Herbert Jauch said that in the absence of a qualifying successor for a leadership position in the public enterprise, there should be a justification to appoint or extend the contract of someone beyond retirement age.
According to him, there should be justification for specialised skills, and why there are no chances created for younger people to take over those positions.
These appointments, he said, should be reviewed on a regular basis.
“Retirement age is there for specific reasons. that people can enjoy the last few years without the pressure of work, and also that in a labour market that is tight like ours, that position becomes available to other people, and that it is not the same old crew that continues to occupy them to keep others out. People should not stay on longer than necessary,” he said.
By law, those who have reached the age of 60 are entitled to their pension savings and old age grant.
