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Ramaphosa spells out plans for better oversight, coordination of SOEs

Mismanagement and corruption have brought some state-owned enterprises to the brink of bankruptcy, reliant on repeated government bailouts to keep afloat.

FILE: President Cyril Ramaphosa replies to the debate on the State of the Nation Address in Parliament. Picture: GCIS

CAPE TOWN - President Cyril Ramaphosa has spelt out plans for better oversight and coordination of state-owned companies so that they can help grow the economy instead of being a drain on the fiscus.

Mismanagement and corruption have brought some state-owned enterprises to the brink of bankruptcy, reliant on repeated government bailouts to keep afloat.

Replying to the debate on his State of the Nation Address in Parliament on Tuesday afternoon, Ramaphosa also pledged swift action on bringing down the cost of data, removing the red tape that is stifling small business es and a crackdown to ensure government pays its suppliers within 30 days.

The president has fleshed out details of plans to properly harness state-owned companies as drivers of the economy.

“We will soon be completing work on a new, centralised ownership model that will allow for better strategic alignment, improved coordination and more effective oversight.”

It’s proposed that this include a State-Owned Company Coordinating Council to provide high-level strategic direction which Ramaphosa will chair.

Ramaphosa says the new ownership model will include new ways of funding state-owned enterprises and a possible shift towards a bigger mix of debt and equity finance.

“Where circumstances are suitable, and where the developmental function of an SOE is not compromised, there may be opportunities to involve strategic equity partners as minority investors in some of our SOEs.”

Ramaphosa says he will be meeting board chairs, CEOs and CFOs to clarify their mandates and discuss their plans for financial sustainability and the promotion of local manufacturing.

(Edited by Zamangwane Shange)