By Phenyo Selinda
resident Cyril Ramaphosa has transferred the shareholder responsibilities of several major South Africa’s state-owned enterprises (SOEs) to their respective line-function ministries. This decision, formalized through presidential proclamations, marks a shift in how these enterprises will be managed and overseen, with the potential to reshape the landscape of South Africa’s public sector.
The Transfer of Responsibilities
President Ramaphosa’s decision affects a range of key SOEs, each now falling under the direct oversight of specific ministries. These include:
• Alexkor: Transferred to the Minister of Mineral and Petroleum Resources.
• Denel: Now under the Minister of Defence and Military Veterans.
• Eskom: Assigned to the Minister of Electricity and Energy.
• South African Forestry Company Limited (Safcol): Transferred to the Minister of Forestry, Fisheries, and the Environment.
• South African Airways and South African Express: Both have been transferred to the Minister of Transport.
• Transnet: Also now under the Minister of Transport.In addition to these transfers, the President has vested certain sections of the Overvaal Resorts Limited Act and its repeal act with the Minister of Water and Sanitation. This shift in responsibilities is a part of a broader strategy to streamline the management of SOEs and ensure that they are more effectively aligned with the ministries that are most closely related to their operational sectors.
Implications for the SOEs and Their Oversight
The reassignment of these SOEs is not just a bureaucratic shuffle but part of a larger plan to improve the efficiency and accountability of these entities. The idea is that by placing SOEs directly under the ministries that align with their core functions, the government can enhance their performance and reduce the layers of management that have sometimes led to inefficiencies.
For instance, Eskom’s transfer to the Minister of Electricity and Energy is seen as a crucial step in addressing the country’s ongoing energy challenges. This move aims to consolidate efforts to manage South Africa’s energy crisis more effectively, under a single, focused ministry.
Similarly, Denel’s move to the Minister of Defence and Military Veterans could be seen as an effort to bring the SOE’s activities more in line with national defence priorities, potentially aiding in the revival of this ailing enterprise.
The Role of the Department of Public Enterprises (DPE)
Despite these changes, the Department of Public Enterprises (DPE) will continue to exist for now, albeit with a diminished role. The DPE will operate until all its human and financial resources are appropriately transferred to the relevant ministries. To manage this transition, President Ramaphosa has appointed Maropene Ramokgopa, the Minister in the Presidency responsible for Planning, Monitoring, and Evaluation, as the executive authority of the DPE.
Minister Ramokgopa has also been tasked with finalizing the National State Enterprise Bill. This legislation is expected to outline how shareholder responsibilities will be managed in the future, with a phased transfer of SOEs into a new national enterprise holding company. This holding company is designed to centralize the management of strategic SOEs, thereby reducing the political influence and improving governance within these critical entities.
Reactions and Public Discourse
The transfer of responsibilities has sparked a wide range of reactions across the political spectrum and among the public. On social media platform X (formerly Twitter), many have voiced their opinions on the potential impact of these changes.
Supporters of the move argue that this reallocation of responsibilities is a step in the right direction, potentially leading to more focused and efficient management of SOEs. They believe that by aligning SOEs with their respective ministries, the government is laying the groundwork for more targeted oversight and policy implementation.
Critics, however, have expressed concerns about the implications for transparency and accountability. Some have questioned whether the ministers will have the necessary expertise and capacity to manage these complex entities effectively. Others worry that the move might merely be a reshuffling of responsibilities without addressing the underlying issues that have plagued these SOEs, such as corruption and mismanagement.
Looking Ahead: The National State Enterprise Bill
The upcoming National State Enterprise Bill is expected to play a critical role in the future governance of South Africa’s SOEs. According to sources close to the presidency, the bill will establish the State Asset Management SOC Limited (SAMSOC), a holding company that will consolidate the state’s shareholding in key SOEs.
The bill is also expected to outline a comprehensive national strategy for these enterprises, encompassing performance targets, financial turnaround strategies, and provisions to attract private sector investment. This strategy will likely include measures to limit political interference, although the President’s role in appointing key figures to the holding company’s advisory committee has raised some concerns about the independence of the process.
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