President Cyril Ramaphosa has made good resolutions to put South Africa’s state companies into their overhead portfolios.
On Monday (26 August), the president assigned shareholder responsibility for each of the state-owned enterprises that previously fell under the Department of Public Enterprises to the respective line-function Ministries.
Ramaphosa signed proclamations which, in terms of Section 97 of the Constitution of the Republic of South Africa of 1996, transfer the administration, powers and functions entrusted by the specified legislation as follows:
- Alexkor: Minister of Mineral and Petroleum Resources
- Denel: Minister of Defence and Military Veterans
- Eskom: Minister of Electricity and Energy
- Safcol: Minister of Forestry, Fisheries and the Environment
- South African Airways: Minister of Transport
- South African Express: Minister of Transport
- Transnet: Minister of Transport
In addition, certain sections of the Overvaal Resorts Limited Act of 1993 and the Overvaal Resorts Limited Act Repeal Act of 2019 are vested with the Minister of Water and Sanitation.
The President has signed a proclamation appointing the Minister in the Presidency responsible for Planning, Monitoring and Evaluation as the executive authority of the Department of Public Enterprises (DPE), which will continue to exist and operate until the human and financial resources are transferred appropriately.
This appointment empowers the Minister to exercise with respect to DPE all relevant powers and functions under the Public Service Act of 1994 and the Public Finance Management Act of 1999.
The Minister in the Presidency responsible for Planning, Monitoring, and Evaluation has also been assigned the responsibility to finalise the National State Enterprise Bill, which will set out the exercise of shareholder responsibility for respective SOEs, which will be transferred in a phased manner into the envisaged national enterprise holding company.
The National State Enterprise Bill aims to:
- Enable the development of a ‘national strategy’ for state-owned enterprises.
- Establish the State Asset Management SOC Limited (SAMSOC), with the state as its sole shareholder.
- Consolidate the state’s shareholdings in “strategic” SOEs through a centralised shareholder model;
- Phase in these enterprises as subsidiaries of SAMSOC over time.
Both the Presidential Review Committee on SOEs and the National Planning Commission have endorsed the creation of a comprehensive long-term strategy for SOEs, consolidating their mandates, supervision, and operations under a unified law.
The bill specifies that the strategy must encompass performance targets, sectoral and specific objectives, developmental obligations, matters related to financial turnaround, and provisions to facilitate private-sector investment.
The President will play a central role in forming the strategy for the holding company and its subsidiaries, with guidance from the Presidential Advisory Committee to “limit political influence.”
The Committee must include three national executive members appointed by the President, one representative each from organised labour and business, sector-specific experts chosen by the President, and a representative from the holding company selected by its Board.
However, with the President responsible for electing several Committee members, questions have been raised about independence.
Read: Big changes for state-owned companies in South Africa
