SOEs pivotal to economic growth, says Gordhan

Public Enterprises (DPE) Minister Pravin Gordhan says State-owned entities (SOEs) are pivotal to the growth of South Africa’s economy, as they can be used as a driving force to power government’s agenda to better the lives of all South Africans.

The Minister was delivering the Department of Public Enterprise (DPE) Budget Vote Speech in Parliament on Tuesday.

“As government, our fundamental responsibility is to create an enabling environment where the dreams of our people are not held hostage by selfish interests driven by greed, cynicism and saboteurs, involving treasonous acts on our infrastructure and pillaging of State resources.

“Our socio-economic transformation agenda is predicated on the urgent need to deliver on our commitment to social justice and affirm the ideals enshrined in our Constitution.

“SOEs play a vital role in creating and enhancing the economic and social wellbeing of all South Africans. This reality underpins our work to revitalise our SOEs and reclaim them from criminals and the beneficiaries of State capture, whose treasonous acts mean that Eskom cannot deliver safe and reliable electricity supply.”

Gordhan emphasised that Eskom and Transnet, in particular, are critical for the pace at which the country can grow.

“The network industries — energy (electricity) and the logistics sector — are key to South Africa’s ability for faster and a more inclusive way to generate economic growth. Our people need a reliable supply of electricity to run their small businesses, light up their streets, and for their children to learn.

“Our people need reliable trains to get to work. Our miners and farmers need efficient ports that enable them to export their produce and remain competitive. There is an urgent need to overhaul our rail, ports and logistics infrastructure in order to cut the cost of doing business, create more jobs, and boost business confidence,” he said.

Gordhan said government is already embarking on plans to improve the performance of SOEs through reforms.

“The reform of our SOEs and indeed of our broader society and economy is an absolute imperative. The National Development Plan (NDP 2030) suggests that the significant SOEs need a clear public interest mandate and straightforward governance structures, enabling them to balance and reconcile their economic and social objectives.

“For the large SOEs involved in economic infrastructure provision, their mandate should include the imperative of financial viability and sustaining their asset base and balance sheet to maintain and expand services.

“We now know that SOEs’ finances (balance sheets), operations, governance, culture, and skills base have been compromised [by State Capture], and require reform. Furthermore, SOEs aim to deliver economic and social development, leading to social justice.

“South Africa is a middle-income country. It finds itself in a middle-income trap where it cannot transit to higher levels of economic development, unless we do things differently,” he said. –

Source: South African Government News Agency