In an article by Robert McGregor of Cirrus Capital on LinkedIn, it was revealed that the Frazer Institute ranks Namibia in the 113th position (of 165 countries measured) for economic freedom. According to the author, “This puts Namibia in the third quartile. While Namibia has improved her score to decent levels for Size of Government and Sound Money, Namibia scores poorly (and her score has deteriorated) for Legal System and Property Rights (owing to crime and court backlogs, amongst others), Freedom to Trade Internationally (given tariffs and other protectionist measures), and Regulation (particularly on business regulation and freedom to compete).
The evidence is clear that the approach to growth, wealth creation and prosperity requires economic freedom. Providing institutions and protections for core principles is necessary, but there must also be allowance for individuals – natural and juristic – the freedom to make their own economic decisions. Unfortunately, Namibia still falls short in allowing such economic freedom.”
It is alarming that the government entrusted business regulation and freedom to compete to SOEs, hoping they could outperform the government in achieving its economic objectives. Yet, it is the area where the government’s endeavours are marked down by global research institutions such as the Frazer Institute.
We talk a lot about the ‘ease of doing business’ in Namibia and its importance in attracting foreign investment and developing our economy. Yet when you speak to anyone who has to deal with SOEs entrusted with the Regulation of business and freedom to compete, it is a tale of frustration and dismay about the attitude of these regulators.
In theory, the CEOs of all SOEs and other government bodies should have a performance agreement. However, if these performance agreements fail to support the government’s objectives, one may ask if they are worth the paper they are written on. Critically, do these performance objectives address the ‘ease of doing business’ in Namibia? To attract foreign capital and grow the economy and employment, Namibia should offer a superior environment for the ‘ease of doing business’ relative to our neighbours.
I suggest that the government must ascertain that every new CEO performance agreement of every SOE or government body that is supposed to promote the business environment, economic development, job creation and other socio-economic government objectives must stipulate how their achievement of socio-economic objectives will be measured and must account to what extent there was progress towards the achievement of the envisaged socio-economic objective. In the pensions industry, the following are key metrics and should be measured relative to our neighbouring countries:
- To improve pension coverage for the formally employed population and their dependants.
- The average time it takes to set up a pension arrangement.
- Regulatory cost per pension fund member.
- The average time it takes to resolve member complaints.
- The average time it takes to resolve disputes with the regulator.
- The average income replacement ratio of retirees.
SOEs comprise a large segment of Namibia's economy. The performance agreements of their CEOs can either drive or undermine the government’s objectives. They should be a public document, and the public should be allowed to contribute to their key performance areas and how they can be measured.
Important notice and disclaimer
This article summarises the understanding, observation and notes of the author and lays no claim on accuracy, correctness or completeness. RFS Namibia (Pty) Ltd does not accept any liability for the content of this contribution and no decision should be taken on the basis of the information contained herein before having confirmed the detail with the relevant party. Any views expressed herein are those of the author and not necessarily those of RFS.