Testing the Applicability of a Privatization Model on State Owned Enterprises in Namibia

Abstract

Namibia has several State Owned Enterprises (SOEs) some of which are sustainable while others are state-revenue draining. This study was conceived to explore the factors that lead to success and failure of SOEs in Namibia to attempt to develop a privatisation model that could serve as a pilot model for future privatization efforts within the Namibian context. In Namibia, SOEs are faced with a myriad of challenges ranging from politically motivated appointment of poorly skilled boards, lack of monitoring and evaluation mechanisms, ineffective performance management systems, high remuneration for executives which is not paralleled to productivity of the SOEs, corruption, unsustainable debts, burdensome expenditures, financial mismanagement and poor financial performance. Within the Namibian context, SOEs are classified into four categories, namely regulatory enterprises, service rendering enterprises, general enterprises, and economic and productive enterprises. The economic and productive SOEs were selected by their potential for self-sustainability. A semi-structured questionnaire was used to collect primary data from 31 respondents who occupied management positions within the various departments from the 12 economic and productive SOEs. An Exploratory Factor Analysis model was applied for                   analytical purposes using a Statistical Package for the Social Sciences version 23. The results of this study have several implications for Namibia in the sense that the privatisation model                  identified the factors attributable to the private sector as follow: service experience,                 organisational learning and operational efficiency. The study also identified the following factors with attributes to the public sector: poor corporate governance, low levels of risk management and lack of enterprise sustainability. Reform initiatives in the form of privatisation would, therefore, lead to an improvement in sound corporate governance, improve risk management and enterprise sustainability.