'Protect them from the real gangsters' - Gordhan duels with EFF on the state of SOEs

accreditation
0:00
play article
Subscribers can listen to this article
Gordhan said it was important to manage SOEs in a manner that protects them from a wave of state capture from "the real gangsters who parade the streets of South Africa in some or other kind of uniform".
Gordhan said it was important to manage SOEs in a manner that protects them from a wave of state capture from "the real gangsters who parade the streets of South Africa in some or other kind of uniform".
File picture
  • Public Enterprises Minister Pravin Gordhan found himself on the receiving end of a verbal salvo by the EFF in a debate over state-owned entities.
  • He said government would have to adjust its position on some of its state-owned entities.
  • But the EFF said almost all state-owned entities are dogged by corruption, paralysis and failure to serve. 

Minister of Public Enterprises Pravin Gordhan found himself under attack from the EFF over government’s management of parastatals during a debate on state-owned entities (SOEs) at the National Council of Provinces (NCOP).

In debate at the NCOP on Wednesday afternoon, Gordhan stressed that putting state-owned entities at the centre of the country's economic growth and development plans without qualification would not be sustainable for much longer in South Africa.

The debate comes weeks after Minister of Finance Enoch Godongwana tabled a Medium-term Budget Policy Statement (MTBPS) which gave no new allocations to state-owned entities other than R2 billion to help Denel honour its government guaranteed debt.

In his budget speech, Godongwana said government must adopt a "tough love" approach with SOEs and that the state should start to ask itself "difficult questions" about which parastatals it should hold onto as strategic entities for growth and development, and which should be let go.

Between load shedding at Eskom, the SAA business rescue process, Denel struggling to pay salaries, and Transnet announcing its first loss in years at R8.4 billion earlier this month, the silver linings for parastatals remain few and far between.

EFF MP Mmabatho Mokause, who motioned for the debate, said that SOEs must foster growth and serve the people and that any departure from this position for parastatals will occur at the expense of ordinary South Africans.

"The reality is different in this country. This is as a result of a deliberate ploy by the agents of state capture who go about masquerading as saviours. Almost all state-owned entities are dogged by corruption, paralysis and failure to serve. This indicates a problem of political incompetence on the part of the [governing] party," said Mokause.

'The real gangsters'

For his part, Gordhan said it was important to manage SOEs in a manner that protects them from a wave of state capture from "the real gangsters who parade the streets of South Africa in some or other kind of uniform".

Mokause said that  Eskom was on its knees and will be destroyed by power purchasing agreements as its R400 billion debt looms and losses continue. She added that Denel cannot pay salaries and made losses of R2 billion in 2019/20 financial year, despite R1.8 billion in assistance in 2019.

Gordhan said government's approach to SOEs was informed by policies including the Economic Reconstruction and Recovery Plan, which seeks to save livelihoods, mitigate the economic impact of the Covid-19 pandemic and ensure recovery of sectors in our economy.

"The ideal SOE is one the provides strategic service, provides value, is not a market interventionist alone but drive and sustain our economic recovery. It is this that informs what we will decide when it comes to our SOEs, which ones we keep and which ones we let go of," Gordhan said.

The DA's Mlindi Nhanha the theme of "positioning state owned enterprises as the main catalyst for growth and development in South Africa" was "stale" and fails to acknowledge the burden that SOEs place on the fiscus through mismanagement and their continued pleas for bailouts.

"Our SOEs have long been positioned as the main catalysts for growth and this is before the democratic dispensation. Placing the state at the centre of economic development has caused hardships in Venezuela and Cuba and continues to do so in economies on the African continent," said Nhanha.

Get the biggest business stories emailed to you every weekday.

Go to the Fin24 front page.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
15.90
-0.0%
Rand - Pound
21.18
-0.2%
Rand - Euro
18.01
+0.0%
Rand - Aus dollar
11.37
-0.4%
Rand - Yen
0.14
+0.2%
Gold
1,783.36
+0.5%
Silver
22.89
+0.3%
Palladium
1,751.95
+0.5%
Platinum
957.30
+1.7%
Brent Crude
69.23
-5.5%
Top 40
64,800
+1.2%
All Share
71,182
+1.0%
Resource 10
68,661
+2.1%
Industrial 25
93,570
+0.5%
Financial 15
13,736
+1.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot