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South Africa pesident Cyril Ramaphosa has revealed more details of how he plans to fix State-owned enterprises (SOEs), and he will be considering proposals by Members of Parliament (MPs).
He was addressing the National Assembly on Tuesday, in a reply to the debate on the State of the Nation Address (Sona).
SOEs were a topic for discussion at the debate on Monday. Among the proposals by different MPs was to have SOEs reviewed periodically, others called for their privatisation.
Ramaphosa welcomed “concrete suggestions” from MPs. He added that government is developing an SOE strategy and will also be addressing the ownership model of SOEs.
“We will soon be completing work on a new, centralised ownership model that allows for better strategic alignment, improved coordination and more effective oversight.”
This may include a State-Owned Company Coordinating Council, proposed by Economic Freedom Fighters MP Floyd Shivambu, said Ramaphosa. The council will be chaired by the president and would be responsible for “high level strategic direction”, he said.
Further new methods to fund SOEs are on the table. “This includes a shift towards a greater mix of debt and equity type finance,” he said.
“Where circumstances are suitable and the developmental function of an SOE is not compromised, there will be opportunities to involve strategic equity partners as minority investors in SOEs,” he said.
Government will meet with board chairs, CEOs and CFOs of these companies to clarify their commercial and developmental mandates. Further their plans for financial sustainability will be discussed as well as plans to promote local manufacturing, he explained.
During his maiden Sona on Friday, Ramaphosa announced plans to “stabilise and revitalise” SOEs.
Among the structural changes to be introduced include how boards are appointed, and the funding model of SOEs is to be reviewed, Fin24 previously reported.
Ramaphosa also said procurement will be addressed.Source: Engineering News