Black South African executives told to steer clear of state-owned companies
The Black Management Forum (BMF) has called on black executives to not apply for senior appointments within state-owned companies (SOCs) – at least until the government has developed a clear governance framework for these institutions.
This governance framework must also outline the role of the minister of public enterprises, who BMF president Andile Nomlala has accused of “clearly overreaching his authority and behaving like a de facto chief executive officer within some SOCs.”
“The BMF is shocked by the resignations of two seasoned black executives – Phakamani Hadebe and Vuyani Jarana from Eskom and South African Airways (SAA) respectively – within the past two weeks,” he said.
“There was a time when some SOCs were reasonably well-run under the leadership of black people such as Reuel Khoza, Thulani Gcabashe and Peter Matlare.
“However, SOCs have become a slaughterhouse for skilled black leaders and executives whose reputations get tarnished because of factors that are beyond their control.”
Nomlala said that a number of other black leaders and executives are on the verge of submitting their resignation letters due to ‘intolerable levels of political interference’ and the ‘failure of the government to fully support them’ and address the capital structures and funding models of their struggling SOCs.
Balancing act
South African Airways (SAA) CEO Vuyani Jarana tendered his resignation last week, bringing more headaches for the troubled state airline.
His resignation follows hot on the heels on the announcement that Eskom CEO Phakamani Hadebe would also be stepping down.
This may put minister of public enterprises, Pravin Gordhan, in a tough position as he battles to balance the books at the struggling state-owned enterprises while continuing to clear out corruption.
Eskom’s debt is approaching R500 billion ($35 billion), according to data compiled by Bloomberg from public records, including bonds and issued loans, up from about R370 billion a year ago and is compounding the difficulty the government faces in formulating a turnaround plan for the troubled utility.
In April, SAA said it was moving closer to an agreement with lenders to extend R9.2 billion rand ($642 million) of debt – a deal that would buy the unprofitable state airline more time to restore its battered finances.
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