From the Desk of the President - 28 June 2021

From the Desk of the President - 28 June 2021

For some years now, South Africa’s state-owned enterprises have mostly been associated in the public eye with state capture, financial mismanagement and inefficiency. In addition to needing regular bailouts from government, some of the country’s biggest and most important state-owned companies have been struggling to meet their mandates.

These state-owned enterprises (SOEs) should be at the forefront of economic and social transformation. They are responsible for providing the infrastructure and the services on which the economy depends, whether it be in the generation of electricity, commuter transport, water provision, freight logistics or telecommunications.

It is important to remember that the state does not own these companies simply for the sake of it, or because this is what the democratic government inherited from the apartheid state. Rather, our approach to state ownership is informed by the need for the effective functioning of key network industries, such as energy and ports, and by the need to ensure that the basic needs of all South Africans, particularly the poor, can be met.

Successive democratic administrations have supported the idea of a mixed economy, comprising public, private and forms of collective ownership. The balance between these different forms of ownership should be determined by the developmental needs of the country.?

We firmly believe that public ownership is necessary in critical sectors of the economy and that the country needs robust SOEs that are able to drive economic growth and transformation.

This is particularly the case in the delivery of public goods such as electricity and water, where SOEs are able to pursue a developmental mandate in the public interest as opposed to a purely commercial one.

That is why we have made it a priority of this government to turn these companies around, to root out corruption, to improve their governance and to enable them to play the role they should in driving economic growth and employment creation.

To this end, we have embarked upon a number of reforms to strengthen these SOEs so that they can produce the results that the country needs and expects. These reforms are not intended to weaken the public sector or to reduce its role, but to make it a more dynamic and effective part of our economy.

Given the number of SOEs and the differences between them, we are not applying a blanket policy to these reforms. An intervention that works for one SOE may not be appropriate for another, requiring a case-by-case approach.

One of the most important reforms is in the energy sector. We have begun the process of restructuring Eskom into three different state-owned entities, responsible for generation, transmission and distribution respectively. This is because the previous structure of Eskom was ill-suited for a changing energy landscape. It had become inefficient and costly and was not sufficiently transparent.?

The establishment of a transmission entity in particular will mean that Eskom will be able to purchase power from a broader range of providers, both private and public. This will improve transparency, increase competitiveness and promote the purchase of lowest-cost electricity. The result of the changes currently underway will mean that households and businesses should be able to buy electricity at a lower cost and be sure of a reliable supply.

Through the renewable energy independent power producers programme, there has been significant private investment in energy generation. With the proposal to raise the licencing exemption for embedded generation – where companies produce electricity for themselves and other commercial users – from 1 MW to 100 MW, we can expect even more private investment. This is vital at a time when the country is suffering from severe and sustained electricity shortages and where neither Eskom nor the state is able to invest in new generation capacity.

Importantly, these reforms will give Eskom the space to address its financial and operational challenges. They provide a clear path towards a more efficient, financially sustainable state-owned utility that is able to provide cheaper, cleaner energy to all South Africans.

Another critical reform, which we announced last week on a visit to Cape Town port, is the establishment of the National Ports Authority as an independent subsidiary of Transnet. This is not a sudden development; it has been in the pipeline for more than 15 years since the promulgation of the National Ports Act in 2005.?

This a crucial part of Transnet’s broader strategy to revitalise our logistics infrastructure. Transnet plans to invest R100 billion over the next five years in upgrading its infrastructure across the ports system. This will make our ports more efficient and our exports more competitive, and benefit the entire economy.

For the ordinary consumer, it will mean reduced prices in the long term for many of our goods. For our exporters, it will mean greater competitiveness in global markets.

As our exports grow, our economy will expand and create more jobs. More efficient ports will make the entire economy work better – and as port volumes increase, jobs will be created at the ports themselves.

Establishing the National Ports Authority as a Transnet subsidiary with its own board will, among other things, mean that revenues generated by the ports can be used to replace old equipment and upgrade and expand our ports, work which has been delayed for more than a decade. It will also encourage the ports authority to treat all terminal operators fairly and equally in the interests of port users.

Among other things, these reforms will encourage greater private investment in the country’s economic infrastructure. Some people have expressed concerns that this will diminish the importance or reduce the value of SOEs. In fact, the contrary is true.??

These reforms will ensure that while strategic infrastructure remains firmly in state hands, our SOEs will become more efficient and the industries they support will become more competitive. Equally, these reforms are important to ensure that SOEs implement their broader developmental mandates to support all citizens and the economy.?

As we undertake this process of transformation, we are committed to deepening our engagement with labour to ensure that the voices of workers are heard in determining the future of these entities.?

Our policy remains that SOEs must play a crucial developmental role in supporting the growth of our economy. Our task is to place them on a sound footing, so that they can serve their ultimate shareholders – the South African people.

This will enable these companies to fulfil the task for which they exist – to foster inclusive economic growth, to promote the creation of jobs across the economy and to ensure all South Africans receive affordable, quality services.

With best regards,

No alt text provided for this image


Keith Rudd

Entrepreneur at I Sharpen sharpening services

3 年

Mr President. If its your intention to hold onto the SOE's then for the sake of our beloved country, please put qualified, capable and honest people at their helm and make them accountable to an oversight body that is non partisan but truly committed to performance excellence. The country cannot afford more bungling by idiots who want to line their own pockets .

回复
Imelda Beswick

Education and Training Specialist

3 年

Greatest freud on the African continent

回复
Siyabulela mzoxolo Mgcina

Community Representative

3 年

Good day Mr President, a visit from you Sir would mostly be welcomed in the Hub of Rural Area in Nyanyadu Ladybank Farm under Danhausser Municipality in KZN ,. with some help of course Sir as a Father you can't come empty handed , Internet cafe is needed closer to the local schools, other observations can be discussed once you are here Sir because there's a lot so some company from your colleagues as well Sir maybe a necessity in order for some rapid change to happen . Thank you Sir ! My contact number is 0722418102

回复
Rikus Kotze

Building Brands

3 年

Open our restaurants Mr President.

回复
Lerato K. Ramatshidiso II

Student at University of the Free State

3 年

Mr president we want the schools to close for 1 year because you waste our time.??

回复

要查看或添加评论,请登录

Cyril Ramaphosa的更多文章

  • From the Desk of the President - 05 July 2021

    From the Desk of the President - 05 July 2021

    Since the onset of the coronavirus pandemic early last year, we have been waging a struggle on many fronts. We have…

    98 条评论
  • From the Desk of the President - 21 June 2021

    From the Desk of the President - 21 June 2021

    We are now in the midst of a third wave of the COVID-19 pandemic. We may be tired of this persistent enemy, but it is…

    45 条评论
  • From the Desk of the President - 14 June 2021

    From the Desk of the President - 14 June 2021

    In two days’ time we commemorate the fateful events of June 16th 1976, when brave young men and women in Soweto and…

    27 条评论
  • From the Desk of the President - 07 June 2021

    From the Desk of the President - 07 June 2021

    Later this week, I will be travelling to the United Kingdom to attend the G7 Leaders Summit. We have been invited as a…

    38 条评论
  • From the Desk of the President - 31 May 2021

    From the Desk of the President - 31 May 2021

    Today is the anniversary of an event in our history that most South Africans would rather not remember. Sixty years…

    1 条评论
  • From the Desk of the President - 24 May 2021

    From the Desk of the President - 24 May 2021

    Last week media around the world carried heart-rending images of a young boy adrift off the coast of the Spanish…

    23 条评论
  • From the Desk of the President - 17 May 2021

    From the Desk of the President - 17 May 2021

    Our experience with the democratic transition is a lesson about the power of empathy, negotiation and compromise. The…

    8 条评论
  • From the Desk of the President - 10 May 2021

    From the Desk of the President - 10 May 2021

    Twenty years ago, South Africa was the site of victory in a lawsuit that pitted public good against private profit. At…

  • From the Desk of the President - 3 May 2021

    From the Desk of the President - 3 May 2021

    We live in a country where not just journalists but any member of the public is able to freely articulate their views…

    1 条评论
  • From the Desk of the President – 26 April 2021

    From the Desk of the President – 26 April 2021

    Last week I joined more than 40 world leaders at a climate summit convened by US President Joe Biden to discuss the…

    4 条评论

社区洞察