State-Owned Enterprises do not need more Ministerial interference

19 August 2020

Minister of Public Enterprises, Pravin Gordhan’s stated objective to increase ministerial powers to enable him to dissolve Boards of State-Owned Enterprises (SOEs), approaches the issue of governance at SOEs from the wrong perspective and should be completely rejected.

The crippling rot at SOEs is attributable to the government’s heavy hand and poor policies that have created opportunities for abuse and corruption. The answer does not lie in increasing ministerial interference.

Governance policies, which have been flouted with impunity by successive Boards at SOEs, must be assiduously adhered to and should ideally be based on King 4 protocols.

State capture became endemic during the Zuma administration because of the open berth that government, especially the Minister of Public Enterprises, had in influencing personnel appointments and operational direction. As such, the Democratic Alliance (DA) and the country remains justifiably sceptical of increasingly unfettered levers of power in the Minister’s hands.

The Minister already has authority to appoint Boards at SOEs and the responsibility to appoint individuals with integrity is a necessary requirement of that responsibility. It is hardly appropriate nor efficient to make poor appointments and then make a U-turn to reshuffle at will.

While the DA appreciates that the Minister has finally acknowledged the governance mess that currently afflicts almost all SOEs, we disagree with his approach to address these challenges. SOEs must be opened up to private investment to enable the infusion of efficiency and better corporate governance practices for improved business outcomes.

Issued by Ghaleb Cachalia, DA Shadow Minister of Public Enterprises, 19 August 2020