President Cyril Ramaphosa calls on SOCs to contribute to economic revitalisation
The President met with CEOs of over 20 SOCs to discuss their critical role in the economy.
On Wednesday, President Cyril Ramaphosa met with CEOs of over 20 key state-owned companies (SOCs) at the Union Building to discuss the these SOEs can make to economic revitalisation and social development.
Some of the CEOs present were from DBSA, Eskom, IDC, Land Bank, Rand Water, SAA, SABC, SA Post Office, Transnet and more.
According to a statement released by the Presidency, President Ramaphosa requested the meeting to hear the views of the executive leadership of strategic state entities on the challenges they confront in implementing their mandates and the opportunities they have identified to strengthen this sector.
This came after the resignations, a week apart, of SAA CEO Vuyani Jarana and Eskom CEO Phakamani Hadebe, casting the challenging conditions at South Africa’s SOCs into sharp relief.
- SAA CEO Vuyani Jarana resigned last week Thursday
- Eskom announces CEO Phakamani Hadebe has resigned for health reasons
At the meeting, President Ramaphosa emphasised the critical role of SOCs in meeting social needs and driving economic growth and reaffirmed the government’s determination to strengthen these entities and ensure their sustainability. He also noted that several entities are facing severe financial and operational challenges that pose great risks to the South African economy.
Several executives highlighted the need for a better definition of the respective mandates of SOCs and for government policy to more effectively support their achievement. They also raised a number of concerns about the legal and regulatory environment within which SOCs operate, “which are often ill-suited to the specific needs of entities and constrain innovation,” and raised challenges about the exercise, by government shareholder representatives, of their oversight responsibility and inconsistency in the appointment of boards.
The meeting recognised that SOCs have considerable resources and capabilities that, if better coordinated and managed, could have a far greater impact on economic growth and job creation.
President Ramaphosa said:
“This engagement has raised several critical areas that limit the ability of SOCs to drive growth and development. These range from inadequate capitalisation and poor governance to outdated legislation and political interference. As government, we are committed to work with the leadership of SOCs and stakeholders to urgently address these difficulties.
“I appreciate the frank and open manner in which the executives have raised their concerns. Their insights and suggestions are truly refreshing and will greatly assist our efforts to revitalise our state-owned companies and ensure that they properly perform their mandates.”
The inputs made by the executives at the meeting with the president will form part of the initial programme of the Presidential SOC Council to provide political oversight and strategic management to reposition and revitalise SOCs as catalysts for economic growth and development.