ANC wants China-style state entities

2015-07-26 18:00

THE ANC-led government is facing a predicament and needs to urgently overhaul all boards of state-owned entities (SOEs) as they do not serve the developmental agenda as mandated.

This is the view of the SA Communist Party (SACP) in the wake of the latest public spat between Prasa board CEO Lucky Montana and board chairperson Popo Molefe.

In May, Public Enterprises Minister Lynn Brown said she had been tasked by Cabinet during a February lekgotla to “champion the development of an overarching shareholder policy that would define criteria for state ownership”.

This would entail whether government privatises or owns these entities and better defines their mandates.

Brown is expected to table this report at the Cabinet lekgotla, which takes place soon after this weekend’s ANC lekgotla.

SACP deputy general secretary Solly Mapaila said the selection criteria of the boards needs to revisited.

“We need to ensure that board members, and even CEOs in those entities, are people who understand their developmental mandate,” he said, adding that some of the boards were more concerned with business deals.

The recent alliance summit spoke out strongly against undue influence exerted to some of these institutions by politicians.

“Government must be clear. If people are using these institutions for their own benefits, they must be removed.”

Mapaila made an example with Eskom as a key national asset, saying it was set on spending huge amounts of money to procure coal and diesel to keep the power stations running merely because “it’s another way of revenue for business”.

He said the infighting at Prasa, relating to tenders, was highly embarrassing to the ANC-led alliance.

The problems besieging the state companies was worrying government so much that last week’s visit to China by Deputy President Cyril Ramaphosa saw the convening of joint seminar to discuss their role in the Chinese economy.

His delegation included SACP boss and Higher Education Minister Blade Nzimande, who concluded that there are important lessons to be learnt from China, especially on parastatals.

“The SOEs made what is perhaps the singularly most important constitution in the impressive development of the Chinese economy,” he said.

“The PRC [Chinese government] did not follow the neoliberal prescripts of surrendering them to private companies ... Instead, it reformed and repositioned state-owned companies and mandated them to invest in a particular way that was to see the economy grow to unprecedented levels.”

Nzimande said that many countries that had privatised their SOEs never saw much meaningful socioeconomic development.

“In many instances, their development was held to ransom by some of the very same privatised former companies.”

The ANC has made contradictory statements on parastatals, with economic subcommittee chairman Enoch Godongwana speaking of the governing party’s intention to privatise Eskom to help it out of its financial woes.

This would see the private sector taking up 30% of the stake in Eskom’s power-generating assets.
But ANC secretary general Gwede Mantashe and Minister of Public Enterprises Lynn Brown immediately contradicted that, saying there was no policy to privatise.
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