Department of Public Enterprises
Public Enterprises minister Malusi Gigaba expects state-owned enterprises (SOEs) to “correct market failures”.
“SOEs are ... government’s specialist intervention instruments in the economy and (the) extended arm of government (in delivering) critical services,” the minister said.
Speaking at a recent business briefing, he added that − as “strategic instruments” of the developmental state − SOEs should act as catalysts for job creation and economic growth.
According to minister Gigaba, his department’s vision is to “provide economic governance” and “policy coordination” linked to “multiple goals” that include:
• attracting and driving investments;
• enhancing efficiencies;
• transformation;
• building industrial capacity;
• linking small and medium businesses to markets; and
• developing skills.
In order to implement this vision, the department has made “key changes” to the way in which SOEs are managed, requiring each SOE to:
• develop an investment planning framework “not determined by balance sheet constraints” and linked to South Africa’s long-term strategic economic priorities;
• expand and diversify funding sources for the investment plan “beyond the balance sheet and the fiscus”, and including development finance institutions and the private sector;
• “boldly support” procurement from local suppliers, promoting investment in national industrial capabilities; and to
• improve “coordination” between related SOE programmes and all levels of government “to ensure that SOE capabilities are fully leveraged, that implementation is accelerated and the impact of the programmes ... optimised”.
According to minister Gigaba, his department is required to play the roles of shareholder manager, stakeholder manager and change agent in the processes entailed.
“We are resolute that we should spare neither strength nor effort in positioning our SOEs as critical agents for development,” he said.
Sabinet Cape Town Office
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