Speech by Ms P Themba, ANC MP, during the Policy Debate on Budget Vote 9: Public Enterprises, in the National Council of Provinces. Honourable Chairperson, Honourable Minister, Comrades and FriendsChairperson, as we are entering our age of hope; also celebrating the youth’s 30th anniversary; and also approaching the 50th anniversary of the women’s march, we are committed to making sure that all our people share in this age of hope. As a result, we charge ourselves – as leaders of the government - to use the government instruments to make sure that our people share in the wealth of our great country as stipulated in the Freedom Charter.
State enterprises, better known as State Owned Enterprises (SOE’s), constitute an important part of organs of state, broadly defined. They occupy a strategic position in contributing to economic production, wealth creation, employment creation and the national revenue.
Since ours is an economy dominated by private enterprise, the strategic role of these enterprises in counterbalancing the power of private corporations over society cannot be underestimated.
South Africa’s developmental state, as led by the ruling party, the ANC, requires that we nurture and strengthen the strategic role of the SOE’s. Doing so is being faithful to the Freedom Charter. Our commitment to the spirit and letter of the ideals of our Constitution and the Reconstruction and Development Programme remains as strong as ever.
The Department of Public Enterprises has oversight responsibility over these SOE’s and is thus directly charged with making sure that the SOE’s play their role in a developmental state, and we as the ANC in the Select Committee will strongly assert our responsibilities on behalf of our people to ensure that the mandate of the Department and SOE’s are fulfilled.
When the ANC says developmental state, we talk of a state that, on the one hand, is able to promote sustained development, understanding by development the steady high rates of economic growth and structural change in the productive system, both domestically and in its relationship to the international economy. On the other hand, we mean a state that has the capacity to implement economic policies wisely and effectively, whilst remaining mindful of and attentive to our social obligations. This thus requires a strong state.
Let us now turn our attention to DPE and measure them against the requirements of a developmental state.
In South Africa, our economic goals are premised on accelerating economic growth and sharing the gains of such growth amongst all our people. This is all succinctly captured in the Accelerated and Shared Growth Initiative for South Africa (ASGISA). Where does DPE locate itself in terms of ASGISA?
DPE says that it is partly responsible for ensuring that SOE pricing is consistent with the objectives of efficient service delivery that will enable accelerated economic growth in South Africa. In real people terms, this should translate into an effort to make sure that SOE’s peg their prices at levels that ensure the SOE’s are able to thrive in today’s economy, but crucially- that the prices allow the SOE’s to deliver services to South Africans at an affordable price.
In this regard, some SOE’s (e.g. Eskom) are doing better than others (SAA) and it is encouraging to note that DPE says it ‘will promote a pricing policy that supports economic growth and development.’
DPE is involved as shareholder management at both enterprise and industry level. This translates into the Department having to both focus on ensuring that the enterprise is sustainable and also ensuring that the SOEs contribute to the structural efficiency of the industries within which they operate.
This relates to ensuring that SOE’s are run in an efficient manner that adheres to principles of corporate governance, set and meet performance targets and are reviewed against ‘critical performance indicators to ensure that the organization is efficiently managed and customers receive a competitive service.’ Of course, DPE has to achieve all this, without ‘micro-managing’ the SOE’s.
We can all appreciate the magnitude of the above task, especially if we consider the amount of mismanagement that has taken place in some of our SOEs in the recent past. We are also sure that DPE is assisting SOEs in putting in place risk management frameworks that will alert them to potential financial and other risks, which will allow SOEs to better manage these risks.
One of the department’s objectives is to use SOEs as a catalyst for economic development in South Africa and the rest of Africa. This ties in with the ANC-led government’s stated goals of spreading the age of hope throughout our continent.
No country in Africa can grow and be prosperous without placing the whole continent on a path of sustainable growth and development and to participate actively as Africans in the world economy and body politics. Our commitment is and should be focused on the determination that we collectively can remove ourselves and the continent from the dissatisfaction of underdevelopment and exclusion in a globalising world. In this regard, we applaud what Eskom, in particular, has done and will be doing to electrify our continent.
One of the most important aspects of ASGISA is to ensure a more ‘equitable spread of economic activities and opportunities.’ To achieve this goal, it is important that SOEs use their capital infrastructure programme to stimulate economic activities in rural and underdeveloped areas. We all know that more of these areas had access to electricity and transport infrastructure; they are likely to increase their economic activities.
It gives me great pleasure to state that the DPE is indeed adding to our developmental agenda. However, as the case with all-star performers, we must urge them to do better.