From the President's Desk: SA's StatevOwned Companies are Mostly Seen as Corrupt
- In his weekly open letter, President Cyril Ramaphosa stated he understands that state-owned enterprises are usually associated with corruption
- Ramaphosa says the government has begun implementing interventions that will see the economic and social transformation of SOEs
- He said that Eskom will now be split into three structures that will focus on transmission, distribution and generation of electricity
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President Cyril Ramaphosa says South Africa's state-owned enterprises have been linked with state capture, financial mismanagement and inefficiency in the public eye.
In his weekly open letter to the public, Ramaphosa stated that these companies have been failing to meet their mandates while also requiring Government bailouts on a regular basis.
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According to Business Tech, Ramaphosa said that government is now on a mission to turn these companies around by rooting out corruption, improving their governance and enabling state-owned enterprises the role they should be playing to drive economic growth and employment creation.
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Ramaphosa emphasised the importance of state-owned companies, saying that public ownership of these enterprises will drive economic growth and transformation.
“This is particularly the case in the delivery of public goods such as electricity and water, where SOEs are able to pursue a developmental mandate in the public interest as opposed to a purely commercial one,” wrote Ramaphosa.
Ramaphosa also wrote that the government would be undertaking a number of measures to strengthen state-owned enterprises so they can produce the results the country needs and expects.
"These reforms are not intended to weaken the public sector or to reduce its role, but to make it a more dynamic and effective part of our economy," he wrote.
He also added that the reform of state-owned enterprises will be done on a case-by-case approach and not a blanket approach, emphasising that an intervention that works for one SOE won't necessarily work for another.
According to The Citizen, the President also stated that Government has started the process of restructuring Eskom into three separate SOEs: each structure will separately be responsible for the generation, transmission and distribution of electricity.
The reason for this change is that the current structures of Eskom are not suited for the changing landscape in energy. Ramaphosa explained that the introduction of a transmission structure will allow Eskom to purchase power from a broad range of suppliers, in both the private and public sector.
Ramaphosa emphasised that state-owned enterprises should be at the forefront of social and economic transformation.
South Africa moves to Alert Level 4 with new restrictions
Briefly News recently reported that President Cyril Ramaphosa warned the country that we face another grave challenge with hospital admissions rising and Covid-19 infections getting worse with the peak of this wave being higher than the previous two. As a result, new restrictions will be put into place as South Africa moves to Alert Level 4.
A massive resurgence of infections is being experienced in South Africa as the third wave of infections sweeps across the country with more than 11 400 people currently hospitalised with Covid-19. Private and government facilities are buckling under the pressure with ICU beds in short supply.
The only way to combat the virus is to reduce the person-to-person contact, which was the best way to flatten the rate of infection during the first and second waves.
Cabinet has decided that the country is to move to Alert Level 4 with additional restrictions in place for the next 14 days, after which the restrictions will be reviewed. After this period, the restrictions will be adjusted or lifted.
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Source: Briefly News
