The public sector rot

During the past decades, our country has witnessed an accelerated rate of decay of most parastatal and other state-owned institutions. The list may be too long to enumerate and public funds have been poured in by hundreds of millions of our rupees without any sign of progress.

The annual report of the National Audit Office has been consistently drawing the attention of consecutive governments and oppositions on mismanagement of public funds but the resilience of weaknesses persists. In many cases, annual reports and accounts have not been submitted as required by law. Section 7 of the Statutory Bodies (Accounts and Audit) Act is explicit:

•        The Chief Executive Officer of every statutory body shall, not later than 2 months after the end of every financial year, submit to the Board for approval the annual report, including the financial statements referred to in section 6A in respect of that year.

•        After approval by the Board, the Chief Executive Officer shall, not later than 3 months after the end of every financial year, submit the annual report, including the financial statements, to the auditor.

•        The auditor shall, within 5 months of the date of receipt of the annual report pursuant to subsection (2), submit the annual report and his audit
report to the Board.

Section 7A of the Act goes further and provides for disciplinary action upon non-compliance with section 7 and states: “the Board may, after giving an opportunity for the officer to be heard, take appropriate action against the officer”.

Tax payers have been helplessly witnessing the persistent failure in their duties of certain chairpersons, chief executive officers, and board directors where section 7A has been completely ignored at the detriment of the institution/s they were appointed to serve. To add insult to injury many of them have been re-appointed! There are also certain bright people holding these offices who fail to show independence and choose to do what they have been directed to do regardless of the interests of the institution they are serving. To compete globally, we need to get rid of such feudal thinking at board level. Those who play safe, those who never voice their views and who shift with the tide are the worse of directors.

The major source of decay is the process of appointment of chairpersons, chief executive officers and board directors. All political parties in power have been consistently appointing “their people” in these positions of high responsibility regardless of their integrity, technical ability, relevant qualifications and experience. History has taught us how people in power generally surround themselves with “advisors and senior advisors” who praise them for their personal benefits. Most of these advisors play their game marvellously well in ma-king those endowed with power believe that the prince is superior and always right, thus leading to misuse of power, poor governance and corruption. In the case of CEOs, boards of
government-owned institutions have been simply rubber-stamping the choice of Ministers and/or Prime Ministers. One wonders whether all these political appointees would be eligible to a clean certificate of morality.

The major causes of the de-cadence of most parastatal and other government-owned institutions have been poor quality of chairpersons, board directors, chief executive officers and, last but not least, political interference. Mauritius Broadcasting Corporation, Mauritius Duty Free Paradise, Air Mauritius, State Investment Corporation, Mauritius Post and Cooperative Bank, University of Technology Mauritius are a few of the glaring examples.

Government in collaboration with the private sector should take the challenge of eliminating the lame ducks and ensuring that our institutions become role models by the time we celebrate the 50^th anniversary of our beloved country on 12 March 2018. The clock has already started ticking! Such challenges are achievable provided we are honest and serious in creating a culture where discipline and accountability matters, bearing in mind that the major ingredient to promote credibility is transparency.

The starting point where all institutions of our country stand to benefit is the scrupulous enforcement of the concept of “fit and proper person test”, as very clearly set out under section 46 of the Banking Act 2004, to all our institutions. It will also be in line with basic principles of good governance if such appointments be limited to a maximum of say 6 consecutive years bearing in mind that institutions are representatives of society and that values drive progress and define the quality of life of a country.