ANC secretary-general Ace Magashule said government had been called upon to prioritise economic growth and job creation. Picture: Kim Ludbrook/EPA/ African News Agency (ANA)
ANC secretary-general Ace Magashule said government had been called upon to prioritise economic growth and job creation. Picture: Kim Ludbrook/EPA/ African News Agency (ANA)

ANC gives go-ahead to salvage ailing SOEs

By SIVIWE FEKETHA Time of article published Jan 23, 2020

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Johannesburg - The ANC says it has finally given the government the go-ahead to restructure state-owned enterprises (SOEs), including bringing in the private sector in a bid to save them from financial crisis and potential collapse.

The party was tabling the outcomes of its national executive committee (NEC) meeting and lekgotla, held from Friday until Monday.

Central to discussions were the ailing economy, cash-strapped SOEs and the state of local government.

ANC secretary-general Ace Magashule said government had been called upon to prioritise economic growth and job creation in its effort to stabilise SOEs, including Eskom and the SA Airways, which has now been placed under business rescue.

“Furthermore, SOEs need to be stabilised and restructured to be able to effectively contribute towards economic growth and transformation and the process of rooting out corruption must continue so that the state structures and SOEs serve the people. It is also agreed that strategic partners must be engaged on SOEs,” Magashule said.

The continuous invitation for the private sector to manage some of the SOEs has been rejected by some within the ANC and its alliance partners as they described it as a move towards selling off the country’s assets.

Magashule added that the appropriate forms of partnership with private companies, investors and workers would be considered particularly where it would enable public enterprises to better fulfil their roles.

“The SOEs as a group face significant financial challenges which arise in part from the broader economic slowdown, which reduces their revenues. (It also includes the) high debt incurred to maintain investment over the past decade and in some cases from corruption that pushes up their cost structures,” Magashule said.

The move to restructure SAA is set to see a number of jobs slashed. Unions have blamed the carrier’s woes on corruption, dubiously inflated, evergreen and historical contracts which the airline continued to honour.

Magashule said SAA would, however, remain in the hands of the state, even if the private sector was brought in.

“SAA should be retained as a national airline, which will require substantial restructuring,” he said.

“Cabinet should take the operational decisions needed to achieve that,” Magashule added. 

Closing the lekgotla on Monday, President Cyril Ramaphosa said the party would no longer allow the deployment of people who were not appropriately qualified. On Wednesday, the ANC, however, pointed out that this did not mean it was considering abandoning its cadre deployment policy. ANC NEC member Dakota Legoete said the party would continue selecting candidates among its members and in society people who were loyal and skilled and could drive the ANC’s resolution and deploy them.

“We are not abandoning our cadre deployment policy. What we are saying is that in some instances we must acknowledge that there has been a failure in terms of deploying the necessary and relevant skills to the relevant positions and as a result we have undermined our capacity to deliver on our mandate,” Legoete said.

Co-operative Governance and Traditional Affairs Minister Nkosazana Dlamini Zuma admitted that 40 of the 257 municipalities in the country were placed under administration due to being dysfunctional.

“Reasons for problems vary. In some of the municipalities, it is the funding model that is the problem in that they are small municipalities that do not have a revenue base from which to collect revenue for their spending,” she said.

Political Bureau

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