Privatise underperforming Public Enterprises
THE partial listing of Mobile Telecommunications Limited (MTC) which commenced this week provides a perfect case of what privatisation can do in reducing financial burdens of government while creating generational wealth for citizens.
While the ideal in the MTC partial listing may be different, government must use this example to consider the privatisation of underperforming parastatals that for years have depended on bail outs and loan guarantees.
MTC plans to raise N$3.1 billion in a November listing in which the government seeks to fund its social programmes and cut debt. The planned initial public offering (IPO), according to the company’s prospectus will see MTC sell a 49 percent stake and is the largest listing by a Namibian company and a first by a state-owned entity.
While this listing is expected to help Namibia pare some of its sovereign debt, authorities must come to the realisation that privatisation is also about transferring underperforming public enterprises to those who are in the best positions to run them efficiently.
As Namibians, we must shift our mind-set from our obsession with ownership towards utilisation and productivity. Many of our public enterprises have very weak balance sheets, provide very poor service, suffer from chronic bureaucracy and are very expensive to the taxpayer. Some of them even compete with private entities creating conflict of interest (as both competitor and regulator).
It is under this pretext that for some public enterprises that are poorly performing for years, government’s procrastination and half-hearted steps towards applying brakes to the cannibalisation of parastatals raises questions.
By delaying selling off these companies, resources are literally being stolen to oil the expensive lifestyles of well-connected people and their cronies with unlimited access to tenders in these poorly governed state-owned enterprises. From experience, it is known that public enterprises in Namibia are the feeding bowls of powerful figures which if sold, some tummies surely will shrink.
Some have even alleged that the talk of privatising or partially privatising public enterprises has always been swept under the carpet so that the status quo remains and the looters who are currently sitting pretty will continue to do so. At the rate at which some SOEs are sinking, there is no denying that disposing of some, merging and even reducing them to department status in state agencies will save billions which these bottomless pits are guzzling.
In the region, we have seen so many examples of state entities that have turned into great corporates after being privatised. Yet despite all the examples, the government still wants to cling on to the parastatals and many of them have become a burden to the already depressed fiscus that is reeling from the implications of Covid-19.
We urge government to do the right thing. Privatisation is the path that many countries are taking successfully. Governments are stepping back from running businesses to regulating them. This should be the case in Namibia.