President Cyril Ramaphosa says reforms and immediate measures have been set in motion to turn around ailing state-owned enterprises (SOEs).
President Ramaphosa was delivering the State of the Nation Address at the Cape Town City Hall, on Thursday.
Hundreds of SOEs at national, provincial and local government level are under governmental shareholding or control in sectors covering most of the economy.
“We have…embarked on several immediate measures to restore these companies to health, at the same time as we undertake far-reaching reforms that will make our SOEs more efficient, competitive, accountable and sustainable.
“State-owned enterprises play a vital role in our economy. From water and roads, to energy and ports, to defence and aviation, these strategic assets are necessary to keep our country running. It is essential that we reverse their decline, and position them to contribute positively,” he said.
President Ramaphosa said the Presidential SOE Council has also made some recommendations on government’s ownership of these SOEs.
“The Presidential SOE Council…has recommended that government adopt a centralised shareholder model for its key commercial state-owned companies. This would separate the state’s ownership functions from its policy-making and regulatory functions, minimise the scope for political interference, introduce greater professionalism and manage state assets in a way that protects shareholder value.
“As part of this, preparatory work has begun for the establishment of a state-owned holding company to house strategic SOEs and to exercise coordinated shareholder oversight,” he said.
According to the President, the council is also considering the sustainability of these SOEs.
“To ensure that state-owned enterprises are effectively fulfilling their responsibilities, the Presidential SOE Council is preparing recommendations on state-owned entities to be retained, consolidated or disposed of.
“Any recommendations would be subject to extensive consultation with all stakeholders,” President Ramaphosa said. – SAnews.gov.za
