Experts have applauded President Cyril Ramaphosa’s decision to transfer the administration, authority, and duties of several state-owned enterprises (SOE) to their respective line department ministries.
Ramaphosa transferred embattled state-owned entities Eskom to the minister of electricity, SAA and Transnet to the minister of transport, and Denel to the minister of defence and military veterans, among others.Â
Independent economist Duma Gqubule welcomed the transfer of the SOEs to their line departments.
Gqubule, however, rejected the idea of these SOEs being transferred to the envisioned national enterprise holding company.Â
“Who in their right mind would want to buy shares and invest in a holding company that has underperforming SOEs?” he asked.
“Who would want to invest in them? It [the potential national enterprise holding company] makes no sense from an investment point of view.
“Having a holding company makes no sense because the holding company will be set up, sell its shares and won’t be able to raise much money. The company’s market value won’t be that high.
“This holding company gives credence to the conspiracy theories that there is an agenda by the government to privatise SOEs.
“Through this holding company, the government is looking for a short cut towards financial sustainability. The government won’t raise a lot of money from this. This is idiotic.”
Black business backs the move
Black Business Council CEO Kganki Matabane welcomed the announcement.
“We support the move as it will assist with proper coordination as the policy departments will now also be responsible for implementation. This is a natural and sensible decision,” said Matabane.Â
Ramaphosa said the minister in the presidency responsible for planning, monitoring and evaluation has 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.Â
Ramaphosa’s spokesperson, Vincent Magwenya, explained in a media statement on Monday that Alexkor will head to the minister of minerals and petroleum resources, Denel to the minister of defence and military veterans, Safcol to the minister of forestry, fisheries and the environment, and South African Express to the minister of transport.
These state parastatals previously fell under the now-defunct ministry of public enterprises.
When Ramaphosa announced his government of national unity cabinet in June, no minister of public enterprises was announced.Â
Ramaphosa 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, which will continue to exist and operate until the human and financial resources are transferred appropriately.
“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,” said Magwenya.Â
