Cabinet to implement a central policy governing SOEs
Last week, Cabinet discussed various recommendations from the Inter-Ministerial Committee on State-owned Enterprises (SOEs) as it moves to make these entities more efficient and financially viable. In recent months, international ratings agencies have pegged South African SOEs as a source of concern over their financial management and governance instability.
- Brics willing to finance South African SOEs.
- Futuregrowth stops loans to Eskom, Transnet and other SOEs.
On conclusion of the two-day meeting, Cabinet issued a statement detailing the decisions taken to implement a central policy governing SOEs. Such measures are expected to better place SOEs to contribute to building infrastructure, growing the economy, expanding industry and creating jobs. The decisions included the following:
- A new government shareholder policy that will lead to overarching legislation governing SOEs.
- The setting up of private sector participation framework where the private sector will have greater involvement with infrastructure development at SOEs and closer collaboration between the two parties.
- Determining developmental mandates for SOEs to streamline both non-commercial and commercial activities.
- A guideline for the appointment of boards and executives at SOEs.
- A new guideline for SOEs' directors' remuneration and incentive standards.
The inter-ministerial committee, headed by Deputy President Cyril Ramaphosa (pictured), has been tasked with examining the possibility of doing away with non-strategic SOEs and options for partial privatisation. Government is not keen to entertain full privatisation.