Plans to revitalise SOEs

Plans to revitalise SOEs
South African Finance Minister Pravin Gordhan reacts during a media briefing in Sandton near Johannesburg March 14, 2016. REUTERS/Siphiwe Sibeko/File Photo

Public Enterprises Minister Pravin Gordhan says the department will work with state-owned enterprises on their integrity and stability that will help restore confidence and contribute to economic development.

The Minister said this when he briefed the media ahead of tabling the department’s Budget Vote speech at the National Assembly on Tuesday.

He said this not long after announcing a new interim Board for Transnet, chaired by Popo Molefe, this week.

“Our endeavour in line with what the President said in his State of the Nation Address is to ensure that in the first instance, we would like to recapture the institutions and what does recapture mean?

“It means getting the governance right in each of the six institutions that we are responsible for and that means reviewing all the boards, the kind of record that they have had over a period of time, the diligence with which they have applied themselves to tackling the misdemeanours and malfeasance that have happened to those entities and whether they have been effective in stopping state capture and interrupting its flow,” he said.

Briefing journalists, Minister Gordhan said during the SONA 2018, the President said state-owned enterprises are important in economic development and that it was important to restore their financial stability and entrench a culture of good governance and added that the President assured the nation that government will root out corruption.

The President, Minister Gordhan added, also said that some of the challenges of SOEs are structural and that business models of the SOEs, as well as their funding models, need to be looked at. SOEs needed to fulfil their economic and developmental mandate. There was also a need to appoint people with the requisite skills and integrity to the boards of these institutions.

Minister Gordhan said as a department for the last 50 odd days since his appointment, what has been the approach – firstly – was to recognise that the department was dealing with entities with very powerful budgets amounting to tens of billions of rands and the impact they have on the lives of people.

He said SOEs had the potential to contribute positively to the economy and to promote inclusive growth, investment in the economy, job creation and support small and medium enterprises, among others.

There was also a need to review all the boards, tackle misdemeanours and asking boards to look very carefully at the record of senior managers on what they have been doing over the years.

Minister Gordhan said another area of focus would be to look at technical capacity and entrench a culture of accountability.

He said boards and senior managers needed to understand that SOEs are public institutions and require to work in the public interest.

Minister Gordhan also said that boards and management needed to look at whether there are adequate controls and checks and balances to ensure that good decisions are being made.

He also said that on financial stability, the department would look at engaging with SOEs and lenders to restore confidence. –

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