Structural reforms
When electricity supply cannot be guaranteed, when railways and ports are inefficient, when innovation is held back by a scarcity of broadband spectrum, when water quality deteriorates, companies are reluctant to invest and the economy cannot function properly.
With a view to addressing these challenges, government is accelerating the implementation of far-reaching structural reforms to modernise and transform these industries, unlock investment, reduce costs and increase competitiveness and growth.
Role of state-owned enterprises
State-owned enterprises (SOEs) play a vital role in South Africa’s economy. From water and roads, to energy and ports, to defence and aviation, these strategic assets are necessary to keep the country running. It is essential that government reverses their decline and position them to contribute positively.
Government has embarked on several immediate measures to restore these companies to health, at the same time as it undertakes far-reaching reforms that will make SOEs more efficient, competitive, accountable and sustainable.
The Presidential SOE Council, appointed in 2020, has recommended that government adopt a centralised shareholder model for its key commercial state-owned companies. This would separate the State’s ownership functions from its policy-making and regulatory functions, minimise the scope for political interference, introduce greater professionalism and manage state assets in a way that protects shareholder value.
As part of this, preparatory work has begun for the establishment of a state-owned holding company to house strategic SOEs and to exercise coordinated shareholder oversight.
To ensure that SOEs are effectively fulfilling their responsibilities, the Presidential SOE Council is preparing recommendations on SOEs to be retained, consolidated or disposed of. Any recommendations would be subject to extensive consultation with all stakeholders.
Source: State of the Nation Address Highlights [PDF]
