ANC still to decide on plan for SOEs, says Mbalula

The ANC has yet to discuss whether it will forge ahead with the National State Enterprises Bill, which would see state-owned enterprises (SOEs) operating under one company, secretary-general Fikile Mbalula says. 

He was speaking on the sidelines of a national working committee meeting with Gauteng provincial leaders on Monday. 

“There will be a discussion in the ANC about a state company that is going to be created [but] that does not mean that line function ministries will change in terms of what has been assigned to them and what belongs to them,” he said. 

Mbalula’s statement signals that the ANC and the government are not in unison over the future of these entities. 

The bill was introduced to the ANC by former minister of public enterprises Pravin Gordhan last year, months before President Cyril Ramaphosa announced that he was dissolving the ministry in line with an ANC resolution. 

The bill states that the president will be the sole representative of the holding company but may transfer any power or function referred to in the legislation to another member of the cabinet. The holding company will act through its board, appointed by the president.

It’s also understood that only profitable SOEs will be transferred to the holding company. Others will have to be restructured or consolidated.

The Sunday Times recently reported that while Ramaphosa’s administration seems determined to forge ahead with the formation of the State-Owned Holding Company (HoldCo), in line with the Zondo commission recommendations, some in his party are still lobbying against the move. They argue that the control of SOEs should rest with line departments as per a resolution adopted at the party’s national conference in 2022.

Ramaphosa has signed a proclamation transferring Alexkor to minister of mineral resources & energy Gwede Mantashe; Denel to minister of defence Angie Motshekga; Eskom to minister of electricity & energy Kgosientsho Ramokgopa; Safcol to forestry, fisheries & environment minister Dion George; and SAA, Transnet and SA Express to transport minister Barbara Creecy.

While it is widely believed that the move will be temporary, some ANC leaders have pointed out there is no ANC resolution on the holding company.

“We must discuss what we mean by a state-owned company ... within the ANC and the broader tripartite alliance,” said Mbalula.

Supporters of the bill say Ramaphosa is working towards preventing SOEs becoming a feeding trough for ANC cadres, while some cautioned Ramaphosa may be opening another can of worms by centralising powers in the president's office. 

Mbalula said the HoldCo was a global model that would be used to boost the creation of a sovereign wealth fund much like in advanced democracies.

 “SA is venturing into that. We have not had a full decision in the ANC with a view that is firm ... We have taken a view as the conference — and it is implemented — to do away with the public enterprises department as a ministry and we have a conference resolution that says we must take all these state companies to line ministries.”

The sovereign wealth fund plan was introduced by the ANC in 2017. The EFF then adopted it in its own strategic growth policy, explaining that it was to widen the non-tax revenue streams of the state and save wealth for future generations. Floyd Shivambu, who was EFF deputy president at the time, described the fund as one of the most dynamic, pragmatic solutions to uplift SA. 

A similar fund has been created in Singapore, Norway and the United Arab Emirates. 

In 2020, then finance minister Tito Mboweni said a wealth fund was an important long-term tool for saving and investment for future generations. He said it could also contribute to strengthening the fiscal framework.

“We must learn to save during the good times, and a fund can play a role as a countercyclical fiscal tool. Today, we announce the wealth fund with a target capital of about R30bn, which converts to about $2bn,” he said at the time. 

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