THE FUTURE OF STATE-OWNED COMPANIES IN SOUTH AFRICA

by Lynne Brown, Minister of Public Enterprises

OVERCOMING ADVERSITY, OPTIMISING OPPORTUNITY

 

Lynne-BrownThe South African government is a global leader in the developmental state space and since 1994 has been a pioneer in the realisation of the transformation agenda. Firmly at the helm of people-centric governance, it is committed to honouring the social compact of uninterrupted security of supply to all South Africans. The DPE is core to this social compact and in collaboration with key role-players remains committed to achieving this goal.

With a substantial portfolio of SOCs, the DPE has both expertise and experience in the impact the Entities have on scale – both positively and adversely. In the last five years (2009 to 2014) of the previous MTSF period, there has been clear national and regional illustration of the increasing role that SOCs have to play in the economy through the implementation of the New Build or Capacity Expansion Programme. Without this Programme, in spite of the challenges, Southern Africa may well have featured in political atlases, very differently.

During this period, Transnet successfully launched its Market Demand Strategy that dramatically increased infrastructure expenditure from R110-billion to R300-billion over the next seven years. The national freight carrier has improved by 24% in terms of on-time train departures compared to the previous year and by 5% compared to budget; this was due to monitoring and follow-up on the root causes of deviations. Ease of business is central to industrial growth. Furthermore, the turnaround plan for Denel has begun to yield results and refocusing of the SAFCOL and Alexkor Strategies are continuing.

Such encouraging impacts are not confined to South Africa – ramifications, good or bad, are central to the stability of the region and the Continent as a whole. In the 21 years since the dawn of democracy, significant lessons have been learnt in this respect and what is surfacing as key is the collective responsibility of all government departments and stakeholders to effectively deliver through national SOCs.

In this context, DPE is no longer a shareholder ministry de facto responsible for only six strategic enterprises but has been recognised as a pioneer in this field to comprehensively support and revolutionise all of South Africa’s 735 State-Owned Enterprises through a mix of measures and policy instruments – which includes legal and governance as well as administration capacities.

Only a department, which has a net worth of past deliverables, would be mandated by Cabinet (following consultation) with such responsibility – and only a department with critical and scarce skills would be in a position to accept such a mammoth portfolio. This responsibility is the duty government has to all citizens and all people who have tasked political principals to ensure the meeting of their constitutional rights.

The agreement that SOCs’ performances are a national, rather than solely departmental effort, has resulted in re-organisation that optimally locates entities where they are most appropriately utilised to optimise delivery. Cabinet makes such decisions in the interests of the national agenda and to ensure that commitments to the electorate are met.

In the case of SAA, the need for improvement in operational performance together with strong financial performance has been recognised. As a result, in December 2014, Cabinet resolved to shift the oversight of SAA to National Treasury. Collaboration between the Department and National Treasury remains crucial for the full turnaround of the national carrier..

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THE FUTURE OF STATE-OWNED COMPANIES IN SOUTH AFRICA

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