South African president pledges to revitalize SOEs

Cyril Ramaphosa
Cyril Ramaphosa

South African President Cyril Ramaphosa on Wednesday pledged to revitalize state-owned enterprises (SOEs), some of them are facing severe financial and operational challenges.

At a meeting with chief executives of over 20 key SOEs in Pretoria, the president reaffirmed the government’s determination to strengthen these entities and ensure their sustainability.

Ramaphosa convened the meeting after the Statistics South Africa released figures on Tuesday which show that the country’s economy declined 3.2 percent in the first three months of 2019.

The president is under growing pressure to restructure SOEs, some of them are on the brink of bankruptcy due to poor management and alleged corruption, particularly electricity utility Eskom which is blamed for worsening power shortage.

Constant power blackouts in the past few months are believed to be one of the main factors that dragged the country’s economic development.

At the meeting, Ramaphosa noted that several SOEs, which are facing severe financial and operational challenges, pose great risks to the South African economy.

He emphasized the critical role of SOEs in meeting social needs and driving economic growth.

This engagement has raised several critical areas that limit the ability of SOEs to drive growth and development, the president said.

These range from inadequate capitalization and poor governance to outdated legislation and political interference, Ramaphosa said.

The government is committed to working with the leadership of SOEs and stakeholders to urgently address these difficulties, he said.

Ramaphosa said he appreciated the frank and open manner in which the executives had raised their concerns.

“Their insights and suggestions are truly refreshing and will greatly assist our efforts to revitalize our state-owned companies and ensure that they properly perform their mandates,” he said.

According to Ramaphosa’s office, the meeting came to the conclusion that SOEs have considerable resources and capabilities that, if better coordinated and managed, could have a far greater impact on economic growth and job creation. Enditem

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