{"id":777365,"date":"2024-06-18T10:00:00","date_gmt":"2024-06-18T08:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=777365"},"modified":"2024-06-18T09:53:09","modified_gmt":"2024-06-18T07:53:09","slug":"south-africas-big-plan-for-state-owned-companies-hits-a-wall","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/777365\/south-africas-big-plan-for-state-owned-companies-hits-a-wall\/","title":{"rendered":"South Africa&#8217;s big plan for state-owned companies hits a wall"},"content":{"rendered":"\n<p>South Africa&#8217;s plan to change how state-owned enterprises (SOEs) operate has hit a snag in Parliament, but this could be an opportunity for improvement.<\/p>\n\n\n\n<p>President Cyril Ramaphosa previously said that South Africa&#8217;s greatest weaknesses lie in its SOEs, as many struggle with significant debt, under-investment in infrastructure, the results of state capture and a shortage of skills.<\/p>\n\n\n\n<p>In January this year, Public Enterprises Minister Pravin Gordhan tabled the National State Enterprises Bill at the National Assembly, with significant changes to how SOEs operate in the country.<\/p>\n\n\n\n<p>The Bill broadly sets out to do the following: <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The development of a strategy for national state enterprises;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Establishment of the State Asset Management SOC Ltd (SAMco) with the State as the sole shareholder;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Provides for various mechanisms to operationalise a state-owned holding company for national commercial state-owned enterprises. &nbsp;<\/li>\n<\/ul>\n\n\n\n<p>SAMco will hold ownership interests in thirteen key national government commercial enterprises, which can be subsidiaries, and will essentially replace the Department of State Enterprises.<\/p>\n\n\n\n<p>The latest version of the Bill can be found below: <\/p>\n\n\n\n<iframe loading=\"lazy\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/06\/National_State_Enterprises.pdf\" width=\"100%\" height=\"600\"><\/iframe>\n\n\n\n<p>However, with <strong>Parliament&#8217;s latest term dissolving on 21 May 2024<\/strong> ahead of the national election, the Bill <strong>lapsed in terms of National Assembly rule 333(2).<\/strong><\/p>\n\n\n\n<p>According to the Parliamentary Monitoring Group, a lapsed bill can be revived via a house resolution. <\/p>\n\n\n\n<p>That said, the House can revive a bill from the stage it reached before lapsing, but this only concerns Bills that lapsed at the end of an annual session of the National Assembly. <\/p>\n\n\n\n<p>The procedure to revive bills that lapse when Parliament is dissolved is not as clear cut.<\/p>\n\n\n\n<p>Moreover, the Bill will have to be reintroduced to a very different-looking parliament. <\/p>\n\n\n\n<p>After losing its majority in Parliament, the ANC is now forming a Government of National Unity with the backing of the IFP and DA. <\/p>\n\n\n\n<p>The ANC can thus no longer push through a Bill through Parliament without the help of its former rivals. <\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-businesstech wp-block-embed-businesstech\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"mabeS2ueyV\"><a href=\"https:\/\/businesstech.co.za\/news\/government\/777198\/government-of-national-unity-what-the-da-anc-and-ifp-have-agreed-to\/\">Government of National Unity: what the DA, ANC and IFP have agreed to<\/a><\/blockquote><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Government of National Unity: what the DA, ANC and IFP have agreed to&#8221; &#8212; BusinessTech\" src=\"https:\/\/businesstech.co.za\/news\/government\/777198\/government-of-national-unity-what-the-da-anc-and-ifp-have-agreed-to\/embed\/#?secret=qPnfH6RbLH#?secret=mabeS2ueyV\" data-secret=\"mabeS2ueyV\" width=\"500\" height=\"282\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p class=\"has-medium-font-size\"><strong>Opportunities <\/strong><\/p>\n\n\n\n<p>The lapsing could also be a blessing in disguise amid concerns over the second\/latest version of the Bill. <\/p>\n\n\n\n<p>Olga Constantatos from Futuregrowth Asset Management, which has had its <a href=\"https:\/\/businesstech.co.za\/news\/business\/136727\/state-owned-company-to-sue-futuregrowth\/\">fair share of controversy involving SOEs<\/a>, previously said that the second version of the Bill raised additional questions and required clarity. <\/p>\n\n\n\n<p>Although the Bill called for the President to develop a National Strategy with consultation from the newly established Presidential Advisory Committee (PAC), the timeline for such a strategy is unclear.<\/p>\n\n\n\n<p>&#8220;We recognise that multiple strategies have been devised by the various administrations for SOEs, but there has been a crippling lack of execution or implementation of these. Consequently, we are concerned that this objective may turn into yet another example of failed execution,&#8221; said Constantatos. <\/p>\n\n\n\n<p>In addition, the new version of the Bill addresses concerns over the President&#8217;s power to appoint the SOE board by creating an 8-person panel to call for nominations.<\/p>\n\n\n\n<p>Nevertheless, the President is not required to adhere to the panel&#8217;s nominations, raising alarms over their power. <\/p>\n\n\n\n<p>There are also question marks over the omission of references to the Public Finance Management Act and Public Procurement Bill, the transfer of land rights between subsidiaries, the President&#8217;s ability to transfer their obligations to a Cabinet member and the accountability between the SAMCo Board and the various SubCo Boards. <\/p>\n\n\n\n<p>&#8220;Many of our SOEs are a substantial drain on the fiscus. Their reform is paramount for South Africa\u2019s economic recovery,&#8221; said Constantinos.<\/p>\n\n\n\n<p>&#8220;We doubt that version 2 of the National State Enterprises Bill achieves this and argue that further amendments are needed to ensure that the intended outcomes are achieved.&#8221; <\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Read<\/strong>: <a href=\"https:\/\/businesstech.co.za\/news\/government\/777126\/south-africas-president-speaker-and-deputy-speaker-elected-in-gnu-clean-sweep\/\">South Africa\u2019s President, Speaker and Deputy Speaker elected in GNU clean sweep<\/a><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>South Africa was set to create a new SOE to manage other SOEs, but the proposed legislation missed a crucial deadline. <\/p>\n","protected":false},"author":95,"featured_media":738147,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[6757,26,3957],"class_list":["post-777365","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-futuregrowth","tag-headline","tag-soes"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/777365","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=777365"}],"version-history":[{"count":12,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/777365\/revisions"}],"predecessor-version":[{"id":777463,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/777365\/revisions\/777463"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/738147"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=777365"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=777365"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=777365"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}