Presidency Takes the Lead in Major Overhaul of State-Owned Enterprises
Maropene Ramokgopa assigned to lead restructuring and establish new holding company
President Cyril Ramaphosa's office has taken charge of the overhaul of state-owned enterprises (SOEs), placing the responsibility on Maropene Ramokgopa, the minister of monitoring and evaluation.
This shift follows Ramaphosa's decision to dissolve the public enterprises department, which managed five SOEs, in favor of consolidating the ownership of strategic SOEs into a state asset management company.
In his cabinet announcement on Sunday, Ramaphosa stated that the coordination of the former department's SOEs will now be handled by the presidency as part of the implementation of a new shareholder model.
Eskom and Transnet, which are critical to South Africa's energy and transport infrastructure, will continue to report directly to their respective departments.
Ramokgopa will be responsible for establishing the new holding company, according to presidency spokesperson Vincent Magwenya.
The state will be the sole shareholder of the asset management company, though there may be opportunities for strategic equity partners to invest in the individual SOEs.
The collapse of a deal with a consortium led by Mamelodi-born billionaire Tshepo Mahloele, which could have injected R3 billion into South African Airways (SAA), may have dampened investor enthusiasm. This deal's failure may affect the potential influx of cash and expertise needed to revive struggling state enterprises.
The restructuring of SOEs into a single shareholding company increases the responsibilities of the presidency, as Ramokgopa's ministry is part of it. While Ramaphosa's move to centralize oversight may not directly consolidate power, it does enhance his influence over vital economic sectors.
The National State Enterprises Bill, introduced by former public enterprises minister Pravin Gordhan in January, underpins this transformation. The bill grants the proposed holding company budgetary and managerial independence, differing from the current model where government departments manage their respective agencies.
Ramokgopa is expected to reintroduce the bill to Parliament after it lapsed in May, just before the end of the sixth parliamentary term. The revised bill, following significant public resistance, will involve a panel?including labor, business, and two cabinet members?chaired by a retired judge to handle nominations and interviews for the holding company's board.
The government has proposed this new ownership model to reduce political interference, which has adversely affected households. State companies such as SAA, the SA Post Office, Eskom, and Transnet have been major financial drains, requiring extensive guarantees and bailouts over the past three decades. Transnet is now pursuing a major turnaround plan involving private sector participation in managing port terminals and rail operations.
President Cyril Ramaphosa's office has taken charge of the overhaul of state-owned enterprises (SOEs), placing the responsibility on Maropene Ramokgopa, the minister of monitoring and evaluation.
This shift follows Ramaphosa's decision to dissolve the public enterprises department, which managed five SOEs, in favor of consolidating the ownership of strategic SOEs into a state asset management company.
In his cabinet announcement on Sunday, Ramaphosa stated that the coordination of the former department's SOEs will now be handled by the presidency as part of the implementation of a new shareholder model.
Eskom and Transnet, which are critical to South Africa's energy and transport infrastructure, will continue to report directly to their respective departments.
Ramokgopa will be responsible for establishing the new holding company, according to presidency spokesperson Vincent Magwenya.
The state will be the sole shareholder of the asset management company, though there may be opportunities for strategic equity partners to invest in the individual SOEs.
The collapse of a deal with a consortium led by Mamelodi-born billionaire Tshepo Mahloele, which could have injected R3 billion into South African Airways (SAA), may have dampened investor enthusiasm. This deal's failure may affect the potential influx of cash and expertise needed to revive struggling state enterprises.
The restructuring of SOEs into a single shareholding company increases the responsibilities of the presidency, as Ramokgopa's ministry is part of it. While Ramaphosa's move to centralize oversight may not directly consolidate power, it does enhance his influence over vital economic sectors.
The National State Enterprises Bill, introduced by former public enterprises minister Pravin Gordhan in January, underpins this transformation. The bill grants the proposed holding company budgetary and managerial independence, differing from the current model where government departments manage their respective agencies.
Ramokgopa is expected to reintroduce the bill to Parliament after it lapsed in May, just before the end of the sixth parliamentary term. The revised bill, following significant public resistance, will involve a panel?including labor, business, and two cabinet members?chaired by a retired judge to handle nominations and interviews for the holding company's board.
The government has proposed this new ownership model to reduce political interference, which has adversely affected households. State companies such as SAA, the SA Post Office, Eskom, and Transnet have been major financial drains, requiring extensive guarantees and bailouts over the past three decades. Transnet is now pursuing a major turnaround plan involving private sector participation in managing port terminals and rail operations.
