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SOEs take centre stage at ANC NEC meeting, Lekgotla

22nd January 2020

By: Sashnee Moodley

Senior Deputy Editor Polity and Multimedia


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The African National Congress (ANC) National Executive Committee (NEC) has revealed that it was presented with detailed reports on the country’s State-owned Enterprises (SOEs) during its meeting last week and its Lekgotla this week, with the NEC deliberating on how to ensure that SOEs deliver their respective mandates.

ANC secretary general Ace Magashule said in a statement that the circumstances of power utility Eskom and national airline South African Airways (SAA) were discussed in particular.

Both SOEs are facing a myriad of problems, with SAA recently cancelling local and international flights in a desperate bid to save cash.

The ANC said SOEs, as a group, were experiencing financial challenges partly as a result of a broader economic slowdown, “…which reduces their revenues”, while “inefficiency, high debt incurred to maintain investment over the past decade, and in some cases  . . . corruption . . . pushed up their cost structures”.

The ANC meetings considered detailed proposals on improving SOE performance, including the recommendation of an investigation into historical contracts at SAA, which the party says has negatively impacted the airline.

In addition to suggestions on how government should better respond to challenges and ensure that SOEs are efficient, the ANC advocated for the reviewing of SOEs’ institutional designs and business models.

It suggested prioritising those companies under financial pressure and those that fall under strategic sectors.

The ANC suggested “appropriate” forms of partnerships with the private sector, workers and investors, and agreed that government should employ the “necessary skills” for executive, technical and management positions.

“Government support is needed to maintain the national resources and capacity that are embodied in the public enterprises. It must, however, be contingent on them doing more to meet the needs of our people affordably and efficiently. It cannot be a blank cheque that permits continued waste, inefficiency and in some cases corruption at the cost of our citizens, producers, and society as a whole,” the party resolved.

It also wants SAA to remain the national airline, meaning it will need extensive restructuring, which the ANC says Cabinet should work towards by taking operational decisions.  

Turning to Eskom, the ANC says while the new management is implementing measures to turn around the power utility, it wants Cabinet to assist by fast-tracking alternative sources of electricity such as gas, clean coal, renewables and regional partnerships, to ensure that Eskom has the capacity to deal with maintenance and repairs.

The NEC said it would consult its Ready to Govern policy, which will guide the party on structuring and restructuring SEOs, as well as inform its decisions to increase or reduce public ownership in a bid to advance its economic programme.

One of the priorities of the NEC is to ensure that there is no political interference in operational matters, apart from interventions in instances of mismanagement or company failures.

The resolutions coming out of the Lekgotla also focussed on economic growth, which was linked to the success of SOEs.

It called for the removal of barriers to investment in key job creating sectors such as renewable energy, manufacturing, tourism, mining, construction and the digital economy.

“Furthermore, SOEs need to be stabilised and restructured in order to be able to effectively contribute towards economic growth and transformation and the process of rooting out corruption must continue so that State structures and SOEs serve the people. It also agreed that strategic partners must be engaged on SOEs,” said Magashule in a statement.

Edited by David Shepherd
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