State-Owned Enterprises
The government has the responsibility of providing certain basic services such as water, electricity, postal services, road and rail networks, etc. to their citizens. These are often not economically viable and need to be funded by the state. The government often makes such companies the only providers of such services and it is thus a Monopoly.
Offshore Development Company (ODC)
After having spent two years in Paris, France working for the United nations Industrial Development Organisation, the Ministry of Trade and Industry offered me a position at the Offshore Development Company. This company was created (by law) as a public-private-partnership with 15% government shareholding to administer the export processing zones.. I was to be the CEO designate under Dr. A.S. Aboobakar who had many years experience at the Mauritius Export Development and Investment Authority (MEDIA).
When I started in 1996, we had one staff member and no offices of our own. The law had been promulgated, but none of the relevant regulations were yet in place. My job consisted of two focus areas, the applications for EPZ licences, and the establishment of the EPZ infrastructure.
For the approval of EPZ licences a committee was established comprising the Minister of Trade and Industry, the Minister of Finance and the Governor of the Bank of Namibia. Various government employees from various Ministries wee also seconded to assist the work of the EPZ Secretariat.
The establishment of industrial parks meant that I travelled the country making sure the projects were being done properly, and on time. My favourite project was the Oshikango EPZ park. At the time, there was only one warehouse and four or five government houses at the border. As the ODC, we built 14 warehouses but the biggest benefit was that we brought all the electricity, water and communication services to this area. It still gives me a warm feeling recalling the project and seeing the rapid growth of this town.
After two years, I was offered the job of Managing Director of Hazy Investments, the company with the biggest shareholding in ODC. Thus I became a Board Member of the ODC. The shareholders of the company included Burmeister & Partners, Haddis Tilahun, Loine Geingos, as locals. The foreign partners included Taiwanese, Saudi Arabian and British interests. One of the more interesting was the company associated with Executive Outcomes, a mercenary for hire outfit.
I left Hazy Investments after our failed attempt to start a private airline flying daily from Eros Airport to Johannesburg and Cape Town. I nevertheless remained close to the staff, and especially Dr. Aboobakar.
Some years later I was very shocked to hear that the ODC has lost N$ 100 million in an investment with a company based in Botswana.
To my understanding, the money was lost in a 419 scam. (This is named after the penal clause in the Nigerian legal system.) Essentially the financial advisor had promised very good returns on a small investment. After a period of time, 3 to 6 months, the financial advisor returns to the client the interest on the investment and this proves to be bigger than expected. The client insists on a larger investment and the advisor agrees. This happens a few times, with the client investing larger and larger sums in the hope of continuing these profits.
One day however, the advisor is not reachable. By this time the investment has reached staggering proportions and then only does it dawn on the client that it was a scam. If the advisor has also been paying commission fees to locals (including presents to staff), it makes it even harder to press for criminal investigation.
The ODC had invested this large sum of money in the hope of making a good profit. Unfortunately, if it seems too good to be true, it usually is too good to be true.
The effective management of state–owned enterprises is important for all of us. At the end of the day, we all pay for the losses through our taxes.
Government has to examine whether the private sector might be more efficient and effective in running of these public services. In the UK private firms have been tasked with public services such as education, health and transport – under regulation by government authorities.