ANC weighs models for equity partners at SOEs
While the ANC is against wholesale privatisation of state-owned enterprises (SOEs), it recommends finding equity partners as minority investors.
The party ruled out wholesale privatisation of the struggling SOEs, national executive committee member Dakota Legoete told journalists in Johannesburg.
Models for equity partners were discussed at its meeting on Sunday and Monday, Legoete said. These included having private sector businesses as partners, as well as other state entities and even stokvels and burial societies.
The meeting took place shortly after SAA was placed in voluntary business rescue, the Passenger Rail Agency of SA (Prasa) was placed under administration, and as rolling blackouts culminated in stage 6 load-shedding, the highest yet.
At its previous national executive committee meeting in October, the ANC had endorsed the use of equity partners. Legoete said the government and cabinet will announce soon what type of equity partner model for SOEs will be used.
Legoete said that if strategic equity partners were to be found, the government had to remain the majority shareholder. Equity partners would only be brought in for specific SOEs such as Eskom for which capital and skills were needed to “ensure that you keep the lights on”.
Legoete told Business Day that the national executive committee discussed equity partners only for SAA and Eskom and that it still has to receive a comprehensive report on the other SOEs.
He said the ANC had to acknowledge that there has been a “misplacement” in terms of deployment to SOEs and that “we do not have relevant skills either in the boards or the executive”.
“That’s where we bring in equity partners: either with capital or with skills so that we can move forward. Because it has become very clear that we cannot afford to forever bail out SOEs,” he said.
ANC secretary-general Ace Magashule said the committee expressed “deep concern” regarding the social and economic effect of the resumption of load-shedding by Eskom, especially on jobs, households and small businesses, and called on the government to outline steps being taken to fix the problem.
Regarding SAA, Magashule said the committee had received a report on the ailing national carrier and commended “the decisive intervention” by President Cyril Ramaphosa to save the airline through business rescue, as well as the consultation process that preceded the decision.
“Firm action is required to improve the governance and performance of SOCs [state-owned companies] by ensuring the appointment of skilled staff and qualified board members and protecting public institutions from improper interference,” Magashule said.