The minister of finance, Enoch Godongwana says that there are too many state-owned entities in South Africa – but the government is yet to draw up an agreed-upon list of state entities and departments that should be closed or rationalised.<\/p>\n\n\n\n
Answering a parliamentary Q&A, the minister said that the government is re-opening discussions on the topic, but little is set in stone.<\/p>\n\n\n\n
“Given the very tight fiscal framework in 2023\/24 and current problems such as the cost of the 2023 wage agreement, central government departments are re-opening discussions around the rationalization of Departments and public entities,” said Godongwana.<\/p>\n\n\n\n
“Whereas this process is starting up, there is at this stage no agreed-upon list of entities that should be rationalized or closed. Thus, it would be premature to name any specific entities that might be under consideration.”<\/p>\n\n\n\n
“That said, government probably has far too many public entities <\/strong>especially given our fiscal circumstances,” said the minister.<\/p>\n\n\n\n Talk of rationalising SOEs and government departments has been floating around since President Cyril Ramaphosa’s administration came to power in 2018. Some form of rationalisation has already taken place, with several departments merged into one (Mineral Resources and Energy, Sports, Arts & Culture, Higher Education, Science and Technology, to name a few).<\/p>\n\n\n\n However, the cutting back of some of the bloat in Cabinet has been undermined by the president appointing several new ministers as well – most recently the role of Minister of Electricity, as well as reintroducing a Minister of Monitoring, Evaluation and Planning.<\/p>\n\n\n\n Despite Godongwana indicating no concrete plans to rationalise SOEs, some efforts have started to materialise in some departments. <\/p>\n\n\n\n Most recently, on 12 June, the Department of Small Business Development gazetted plans to introduce the National Small Enterprise Amendment Bill that would amend the original act to make way for a new state company in the form of the Small Enterprise Development Finance Agency (SEDFA).<\/p>\n\n\n\n The department said that this new, single, entity would lead to the disestablishment of the three others: the Small Enterprise Financing Agency (Sefa), the Co-operative Banks Development Agency (CBDA) and the Small Enterprise Development Agency (Seda).<\/p>\n\n\n\n SEDFA\u2019s role would be to provide support \u2013 both financial and non-financial \u2013 to small enterprises, including co-operatives.<\/p>\n\n\n\n Talk of new public entities tends to raise eyebrows as failing public entities have been a drain on the national fiscus, such as with Eskom, wherein the Treasury will take over two-thirds of the power utility’s debt – a bailout of around R250 billion rand. <\/p>\n\n\n\n Eskom is also a red flag for the rationalisation project – the government is currently in the process of splitting the company into three separate entities, each with their own boards and processes. Eventually, the single Eskom will become Generation, Transmission and Distribution companies – owned by the state.<\/p>\n\n\n\n Meanwhile, the state plans to establish even more state-run companies, such as an independent Postbank (along with talk of other state banks) and entities related to the National Health Insurance scheme – including the NHI Fund, which will serve as another pool containing billions of rands of taxpayer money.<\/p>\n\n\n\n
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