President Zuma set to steer South Africa's new parastatal strategy

Currently, an inter-ministerial committee led by Deputy President Cyril Ramaphosa has the mandate of SOE oversight. (Sebabatso Mosamo/M&G)

Currently, an inter-ministerial committee led by Deputy President Cyril Ramaphosa has the mandate of SOE oversight. (Sebabatso Mosamo/M&G)

President Jacob Zuma has been named as chairperson of a new co-ordinating committee that will oversee South Africa’s state-owned enterprises (SOEs). 

The move could be seen as a strategy to neutralise Deputy President Cyril Ramaphosa, who has since 2014 had the political oversight of the SOEs. It will also give Zuma more say in as far as the bailing out of parastatals is concerned. In the past there has been tension between Zuma and Finance Minister Pravin Gordhan regarding the direction of SOEs.

Minister in the Presidency Jeff Radebe said on Monday that SOEs have an important role to play in the socio-economic transformation which government has targeted. He was briefing the media on the outcome of Cabinet’s August Lekgotla.

The body set to oversee the SOEs will be called the Presidential SOE Coordinating Council. Ramaphosa revealed it will have a similar structure to the Presidential Infrastructure Co-ordinating Commission (PICC) – which Zuma also happens to chair. The PICC allows the presidency to monitor and co-ordinate major infrastructure development in the country.

Currently, an inter-ministerial committee led by Deputy President Cyril Ramaphosa has the mandate of SOE oversight. Radebe insisted, however, that the establishment of the new presidential council was in no way a “vote of no confidence” in Ramaphosa.

“The inter-ministerial committee chaired by the deputy president is the one working on this matter, so there is no vote of no confidence in the deputy president.”

The decision by the Lekgotla follows on the momentum of Gordhan’s 2016 budget speech, in which he assured that under fire SOEs must address operational issues before they will receive significant financial assistance.

“Our aim is to strengthen our state entities so that they can play a propulsive and dynamic role in our development,” Gordhan said. “Further financial support to state-owned companies will depend on getting clarity of this mandate and firm resolution of governance challenges.

“The strength of our major state-owned companies does not lie in protecting their dominant monopoly positions, but in their capacity to partner with business investors, industry, mining companies, property and logistics developers, both domestically and across global supply chains.”

According to the Cabinet lekgotla, the creation of the new presidential coordinating council and subsequent appointment of Zuma as its chairperson will go a long way to streamlining SOEs to ensure they deliver optimally.

“Work will also start for the creation of the Presidential SOCs Coordinating Council which will provide President Zuma line of sight on strategic decisions and interventions to create SOCs that play a transformative role in a capable developmental state,” read the Lekgotla’s official statement.

“The decisions and plans from the Cabinet Lekgotla will bolster implementation of government’s programme of action and gives confidence that South Africa is on a sustainable social development and economic growth trajectory.”

Luke Feltham

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