In a dazzling display of political optimism, President Cyril Ramaphosa has announced that his newly minted ANC and DA-led government of national unity (GNU) will restore South Africa’s state-owned enterprises (SOEs) to their former glory.
Ramaphosa promised a significant shift in governance, aiming to rehabilitate the SOEs financially and operationally. The implementation of a new centralised ownership model for SOEs is central to this effort, he said.
“We will complete the implementation of a new centralised ownership model for SOEs,” he declared.
“This will improve accountability, transparency, governance, and oversight. While reducing inefficiency and the potential for corruption.”
Ramaphosa made these bold claims during his Opening of Parliament Address on Thursday evening.
State-owned holding company
He said his model will culminate in the establishment of a state-owned holding company. It is envisioned to bolster the country’s capacity to construct a sovereign wealth fund. This draws inspiration from countries that successfully leveraged high-performing SOEs for capital accumulation rather than relying on the national budget.
“Other countries have successfully done this. …They built up capital from the high performance of SOEs rather than the fiscus,” he said.
He said the GNU would achieve the most consequential transformation of South Africa’s electricity industry. And emphasised the ongoing and future transformative efforts within the country’s electricity sector.
“Since the announcement of the Energy Action Plan in July 2022, we have made tremendous progress. [Particularly] in reducing the severity of load shedding,” he said.
Over the next five years, the government aims to prioritise expanding and reinforcing the transmission network. A critical step towards fostering inclusive economic growth.
“To drive inclusive growth, we need an efficient freight rail network. [We need it] to carry our minerals, agricultural produce, and manufactured goods to market,” he explained.
He said the government will continue with reforms to transform South Africa’s freight logistics system. It will achieve this by implementing the Freight Logistics Roadmap.
Robust freight rail network
The efficient movement of minerals, agricultural produce, and manufactured goods is essential for this growth. This movement requires a robust freight rail network.
“The work we are doing with businesses and unions has … started to bear fruit. It has already contributed to improvements in the operational performance of freight rail and ports. The work was done through the National Logistics Crisis Committee,” he said.
Overall, the various components coalesce into a comprehensive strategy. This strategy is aimed at economic revitalisation and sustainable growth. These components are the centralised SOE ownership, electricity sector transformation, and freight logistics reforms.
This multifaceted approach underscored the government’s commitment to addressing structural inefficiencies. It enhances operational standards, and fosters collaborative frameworks for national development. This according to Ramaphosa.
