We are here this morning to witness the official opening of Namcor’s first ever fuel retail site. This development not only provides Namibian motorists a wider choice of fuel outlets to purchase from, but also provides business opportunities to Namibians. This is so because I understand that although NAMCOR did invest in the construction of the site, the site will be operated by Namibian entrepreneurs. I wish to congratulate Namcor on this achievement.
NAMCOR’s retail agenda looks at establishing a sufficient network of profitable sites, that will enable it to later serve remote areas such as regional capitals and rural areas that do not have access to these services. As the shareholder representative, we expect commercially classified state owned enterprises such as NAMCOR to deliver shareholder value at all times. And this has been a challenge to a number of SOEs. I am confident that the steps NAMCOR has taken towards becoming a profitable SOE will bear fruits.
You will agree with me that one of the challenges facing a number of our SOEs is that poor governance. Allow me therefore to say a few words about the importance of an effective corporate governance system in general in any institution.
There is no doubt that the Board of directors is fully responsible for the oversight role of the company. In other words it is the board that is responsible for the performance of any company. In fulfilling its responsibility, the Board needs to put in place measures to monitor and control management in order to strengthen the governance in the company.
However, there appears to be a crisis of confidence when it comes to governance in some of our SOEs. More often than not one reads about some malfeasance in some of our SOEs. The more these happens the more we run the risk of the public losing confidence in the integrity of our SOEs. It is therefore incumbent upon our Boards and Management of SOEs to do everything in their power to demonstrate a strong commitment to the enforcement of clear and firm standards of corporate governance.
At the minimum, such standard of corporate governance must require the Board of directors and Management to execute their responsibilities in the best interest of the shareholder and to act with both competence and integrity. It is therefore important that, going forward, the shareholder ensures that only people who are knowledgeable about the nature of the business of a particular company and those with integrity are considered for appointment as directors on the Board of SOEs.
Given the important and significant roles played by the SOEs in the economy, it is not an exaggeration to say that good corporate governance in our SOEs is a critical factor in our socio-economic development. Currently SOEs have assets of more than N$62 billion and an annual income of more than N$23 billion. These are big numbers by all accounts.
It is therefore incumbent on all of us to ensure that we continue to improve the effectiveness with which we manage State companies. In the end it is the ethical behavior and sound business practices that will matter most in the promotion of good corporate governance. If we do that, we would have heeded the call of our President, Dr. Hage G Geingob, who on numerous occasions has called upon all those in leadership positions to demonstrate transparency and accountability in all what we do in order to create trust with the public.
I therefore wish to urge the Namcor Board and Management to leave no stone unturned in promoting good governance at all levels in the company. If we do that successfully I have no doubt that Namcor will be on its way to become the State Company that all we can be proud of.
Let me conclude my remarks by once again congratulating Namcor on this achievement. As shareholder representative be assured that we will be with you on your journey of becoming the premier State-owned company you certainly can become. Together and acting in the Namibian Harambee fashion, we can make it happen.
It is now my distinct honor to declare this fuel retail site officially open for business.