Johannesburg - The DA says it rejects President Cyril Ramaphosa’s recently proposed state holding company to house all commercial state-owned enterprises (SOEs).
This comes after Ramaphosa, in his State of the Nation Address (Sona), announced such a plan in a bid to fix the collapse of SOEs.
“The proposed new state holding company to house all commercial SOEs, as announced by President Cyril Ramaphosa in his State of the Nation address (Sona), will do nothing to fix the bankrupt SOE sector, but will only serve as a new deployment station for ANC cadres,” the DA said.
In his address, Ramaphosa said the future ownership or shareholding of SOEs would be housed under one company instead of being fragmented through government departments in order to improve oversight of the enterprises.
He added that the proposed state-owned holding company would hold all the equity, some of which would later be sold to private sector partners or the entities listed on the stock exchange to raise capital.
However, DA spokesperson for state enterprises Ghaleb Cachalia said Ramaphosa’s plans would continue the ruling party’s cadre and patronage system, which is at the root of what is going on in this country.
“The DA rejects Ramaphosa’s ‘patronage SOE’ and calls for increased private sector participation in the SOE sector to address the systemic issues that have turned them into a financial burden on South African taxpayers.”
“It is telling that, for a president who has constantly beaten the drum of structural reform to increase private sector investment in the economy, his response to addressing the crisis in the SOE sector is to pursue more state control and create a new SOE to manage collapsing SOEs,” Cachalia said.
He said the mismanagement of the country’s SOEs would not stop just because of the proposed establishment of the holding company to manage SOEs.
“Thinking that deeply entrenched operational and financial mismanagement issues currently affecting SOEs can be solved through a new holding SOE company is not only naive but reckless. The least that the government should be doing now is preparing SOEs for the unavoidable eventuality of private sector participation,” the DA said.
The Star