The ANC and its government must build the capacity of the state to pursue the objectives of a developmental state and to ensure that while SOEs and developmental finance agencies remain financially viable and profitable, their primary responsibility is to support and lead in strategic government developmental objectives within a clearly defined public mandate and to pursue an overarching industrialisation programme.
State-owned enterprises must be one of the key instruments of the developmental state. This will require a comprehensive transformation of the current policy framework and institutional architecture governing state- owned enterprises. Specifically as far as on the role of state-owned enterprises is concerned, for the ANC they are drivers and agents of economic restructuring to advance the developmental objectives of a developmental state. This requires that we enforce the optimal alignment and co-ordination of mandates and operations of SOEs with the broader objectives of a developmental state.
The broader aim must be to restructure the economy in order to create decent job opportunities, equitable income distribution, quality service delivery and social justice. We must ensure viable ways and means to strengthen public partnerships among and within the major state-owned enterprises. SOEs were not created to maximise profit or incur losses, but rather to drive the developmental agenda. The mandate of SOEs is to achieve the balance between the required level of self-funding and theunderstanding of developmental projects that the private sector under normal circumstances would not. SOEs tasked with costly developmental mandates must be strategically positioned to generate the revenues to pay the cost of these mandates.
A developmental state using the strength of SOEs must support and direct private sector investment in the productive sector of the economy to stimulate manufacturing and the promotion of entrepreneurship developmental programmes. These will enhance the deracialisation of the economy and the creation of new firms and industries, as opposed to tender dependence.
SOEs must underpin the role of the state in directing national economic development through the mobilisation of domestic and foreign capital and other social capital formation or partnerships to achieve the goals of the developmental state. The overall objectives and mandate of the SOEs is to advance the socioeconomic and political agenda of the developmental state; to promote social cohesion; to create decent jobs; and skills and training development.
There is overwhelming evidence of the poor alignment of SOEs with government policies and agendas in the short-term to long-term period, as well as an inability to comprehend and deliver on evolving government expectations, particularly short-term expectations. The challenges of the political mandate and the expectation of the shareholder have in recent years led to serious misunderstandings between the political authority and the boards of these institutions.
In some instances the conflict is as a result of the Public Finance Management Act, Act 1 of 1999, and now the New Companies Act, Act 71 of 2008, which determine how these organisations should work to comply with the respective pieces of legislation. A legislative framework, defining state ownership and the shareholder mandate, is necessary.
There is a natural conflict between the commercial interests of these entities and the state developmental interest. Several high-profile examples exist of where there is a dichotomy between public interest and the commercial interests of the SOEs. On the whole, South African SOEs seem to have mixed results when assessed against the competing but equally prioritised economic and sociopolitical objectives.
Although most of the SOEs understand the sociopolitical objectives of the government, there appears to be an element of self-policing in the way these objectives are managed, executed and reported on. On the surface it would seem as if SOEs were meeting commercial objectives because, from a financial statement perspective, they are growing. However, these measures do not take into account the monopolistic position of most SOEs, nor wider GDP-related measures that would provide a better view of performance. The sociopolitical objectives of government are not clearly articulated nor commonly understood by SOEs and, as a result, a perception exists in some areas that sociopolitical objectives encumber the achievement of commercial objectives. For this reason, it is necessary for the shareholder to give leadership and guidance on what should be done to maintain a healthy balance between sociopolitical and economic objectives, as well as to ensure that such processes can be monitored and measured; to develop state capacity to effectively monitor and evaluate SOEs and implement cutting- edge monitoring and evaluation mechanisms; and to implement best-practice guidelines for SOEs on governance, remuneration, performance and other relevant areas.
The NDP outlines a specific role for SOEs to play in the economy as drivers of economic growth, especially in the productive sector. The harnessing of this potential requires focus and dedication, hence the department exists. The fact that the department and the shareholder are dealing with governance issues and realigning the role of SOEs proves the correctness of this strategy. SOEs play a key role in the infrastructure programme of the country, especially in the building programme and achieving its objectives. Again, this requires specific and dedicated oversight. Together with the members of the portfolio committee, we will do the oversight.
In developing the productive sectors of the economy, the SOEs play a key and a critical role in specific sectors. In developing public infrastructure, SOEs will continue to drive the build programme of government, covering energy, information communications technology, transport, water and sanitation. In addition, they will be fast-tracking social infrastructure, including education, health, human settlements, as well as public amenities and cultural facilities, which will be part of the overall infrastructure.
The political head of the department has shown us ...
... indlela esiza kusebenza ngayo nendlela ekufaneleke ukuba sisebenze ngayo siyile komiti ejongene nemicimbi yesebe kunye nabo. Siyayixhasa le voti yohlahlo-lwabiwo mali yeli sebe ukwenzela ukuba siqhubele uMzantsi Afrika phambili. Sinabantwana, sinabantu abasithumileyo kwezi ndawo sikuzo, abalindele ukubona imisebenzi kwiindawo abahlala kuzo hayi imisebenzi esephepheni.
Ngoko ke siyangqinelana singulo mbutho ukuba zonke ezi nkampani mazibenoxanduva lokuya ebantwini, zaziwe, ukuze abantwana bethu bakwazi ukubona amathuba okwakha amashishini khona ukuze bakwazi ukuziphuhlisa ngokwabo. Enye into efaneleke ukuba yaziwe yeyokuba la mashishini karhulumente ayingowabantu abathile, awanakuba phantsi kolawulo labucala ngenxa yokuba kufuneka abe ngawabantu abathile. Aza kuhlala ephantsi korhulumente ukwenzela ukuba abantu bonke bakwazi ukufikelela kuzo. Ukuba awekho phantsi korhulumnte asingekhe sikwazi ukufikelela kuwo sisonke. Enkosi Sihlalo. [Kwaqhwatywa.] (Translation of isiXhosa paragraphs follows.)
[... how we as the portfolio committee are going to, and are supposed to, work with them. We are supporting the department's Budget Vote so that we can take South Africa forward. We have children, and we represent people who expect to see jobs where they stay, not on paper.
Therefore, as the ANC we feel that all these companies should have a responsibility to go to the people and introduce themselves, so that our children can have opportunities to set up businesses and develop themselves in the process. People should also know that public enterprises are not privately owned; they cannot be privately administered with the aim of privatising them. They will remain under government administration so that they can be accessible to all. Anything to the contrary will have the opposite effect. Thank you, Chairperson. [Applause.]]