MTC purchase is a test run

MTC purchase is a test run The minister of public enterprises, Leon Jooste, has suggested that the government’s planned acquisition of Mobile Telecommunications (MTC) may be a test run as the government studies various options to ensure that some state-owned enterprises return to profit.

With the acquisition of MTC a mere formality, Namibian Sun asked Jooste what the rationale behind the purchase was in light of the increasing number of state-owned enterprises, which are now just over 100, and why the government would not rather let MTC list directly on the Namibia Stock Exchange.

Jooste explained the need for state-owned enterprises, saying that in most cases, the provision of goods and services in especially far-flung rural areas was not a priority for the private sector if the economic benefit was not there.

“We need to ask ourselves whether these institutions are relevant, whether they are competing with the private sector and whether it is in the best interests of the public. We will be testing.”

Making the case for MTC, Jooste said state-owned enterprises were generally founded to provide goods and services in areas the private sector would not service.

Speaking generally, he concluded: “We have reached a space where we should consider listing on the Namibia Stock Exchange.”

Jooste indicated that his ministry was working on a position pertaining to the ownership of commercial public enterprises.

“We have developed a framework for the ownership policy for commercial public entities. This policy will guide government in its ownership role of the commercial enterprise and it will be a practical working policy tool which will be used to gauge the enterprise and then recommend appropriate reforms where required.”

His deputy, Engel Nawatiseb, strongly came out in defence, reiterating statements made by Jooste. He said: “The ministry makes recommendations that will allow the cabinet to make a collective decision. We are not going to push agendas.”

A report that will determine the viability of listing various state-owned enterprises is expected to be out by January 2017, Namibian Sun has established in the meantime. On the surface it appears that several discussions have already been held to determine the viability of listing several state-owned enterprises.

Responding, Simonis Storm head of research Purvance Heuer said: “We have had various meetings with the Ministry of Public Enterprises and numerous state-owned enterprises as part of an information-gathering exercise. We are currently working on a report that we would like to release early in January. The idea is to determine the viability of listing coupled with the value that can be extracted from listing.”

Referring Namibian Sun to the ministry, Namibia Stock Exchange chief executive officer Tiaan Bazuin said: “I suggest you ask the ministry what they have done and where they are in the process. I don’t think it’s fair for the Namibia Stock Exchange to disclose what has or has not been discussed.”

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