State Owned Enterprises Holding Company
By Thabo Mosia
Cape Town, South Africa – The government is making significant strides in establishing a holding company for state owned enterprises (SOEs). This initiative aims to streamline the management and operation of SOEs, ensuring better governance and efficiency. The Department of Planning, Monitoring and Evaluation has been tasked with finalising the necessary processes.
New Structure for SOEs
President Cyril Ramaphosa, speaking in Parliament on Wednesday, clarified that SOEs previously managed by the Department of Public Enterprises will now report to their respective line departments for policy and regulatory matters. “The SOEs that were previously under the stewardship of the Department of Public Enterprises will report to their respective line departments in terms of policy and regulatory matters,” President Ramaphosa stated.
Responding to the debate on the Presidency Budget Vote speech, the President reiterated that the government is introducing legislation to establish a state-owned holding company to oversee and coordinate key strategic SOEs. “The legislation will assign the functions of the holding company, which will cover issues of governance, financial management, remuneration standards and similar matters,” he said.
Benefits for South Africans
President Ramaphosa emphasized that these changes are aligned with global best practices and are similar to approaches taken by countries where SOEs effectively contribute to social and economic development. He underscored the tangible benefits these reforms will bring to South Africans, including more affordable and reliable electricity, cleaner water, efficient trains, and lower data costs.
Operation Vulindlela’s Impact
Turning to other issues, President Ramaphosa highlighted the significant progress made through Operation Vulindlela. With a dedicated team in the Presidency and National Treasury, working closely with various government departments and entities, the structural reforms have positively impacted growth and investment.
“These structural reforms are in the most strategic and critical sectors of our economy. They are in energy, logistics, telecommunications, visa reform, and water,” he said. The reforms in the water sector, such as reinstituting water quality monitoring systems, developing a raw water pricing strategy, and establishing a Water Partnerships Office to develop water infrastructure, have direct benefits for service delivery.
Improvements in Water Infrastructure
Improved water infrastructure ensures a more reliable and sustainable water supply, while water quality management systems mean cleaner water and reduced health risks. “The ultimate beneficiary is the people of South Africa, and strengthening and enhancing the economy of our country,” the President noted.
Youth Employment and Training Programs
President Ramaphosa also addressed the need to involve young unemployed people in work, training, and development programs. He highlighted existing initiatives such as the National Rural Youth Service Corps (NARYSEC), which provides opportunities for unemployed rural youth. Additionally, he mentioned other public and social employment programs that include many young participants.
“The challenge we have now is to scale up these programs within available resources to ensure that they have a greater reach and impact,” he said.
Efficient Use of State Resources
On the matter of the size of the Executive, President Ramaphosa acknowledged the complex and urgent challenges facing the country, which require strong coordination from the centre of government. He assured that the government will continue to seek ways to use state resources optimally while ensuring inclusivity and balance.
“We will ensure that the machinery of government works efficiently, and that it is used to advance the people’s interests and improve their lives. We will reduce waste, rationalise and restructure our state-owned entities, and continue to direct the majority of our budget towards sustaining the social wage and investing in infrastructure,” he said.
Unity and Future Vision
President Ramaphosa concluded by emphasizing the importance of national unity in achieving the country’s goals. “We must seize the opportunity that this Government of National Unity presents to restore people’s trust in our democracy and realise the promise of dignity and equality in our Constitution,” he said.
“Five years from now, let us be able to say that we have made a difference in the lives of our people. Let us ensure that we take our beautiful country closer to the society of which we have all dreamed. And let us make sure that we leave no one behind,” the President concluded.
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