Johannesburg - The conduct of some private companies is fuelling the
debate on nationalisation, Public Enterprises Minister Malusi Gigaba
said on Wednesday.
"There is a growing underlying legitimacy crisis
regarding whether the private enterprise is a 'socially responsible'
institution, capable of both developing the economy in a sustainable
manner and equitably sharing the benefits of economic growth and
development," Gigaba told the Black Business Summit in Johannesburg.
"I think it is this legitimacy crisis that underlies
calls for nationalisation and such like," he said in a speech prepared
for delivery at the event.
"The behaviour of a range of private companies,
including some privatised state-owned enterprises, is providing plenty
of fuel for this debate."
He was referring to the debate on whether to
nationalise South Africa's mines and banks, after calls by ANC Youth League leader Julius Malema.
In response, the ANC is conducting an independent
study on whether nationalisation is viable and will discuss the
findings of the study next year.
Gigaba said he was regularly asked whether state-owned enterprises (SOEs) should be privatised.
"Somehow, there is that old assumption, ideologically
informed, that SOEs are inherently inefficient, incompetent and corrupt
relative to the private sector and that therefore if they were
privatised, they would discard all these bad habits.
"If we may be allowed to pose the question: is there
anything intrinsic in the private sector that makes it more efficient
and competent? or, posed differently, is there anything in the public
sector that makes it intrinsically antithetical to all of this."
SOEs had an important role to play in developing vital
economic infrastructure, managing state assets, and driving the
transformation of customers and suppliers, he said.
Gigaba asked whether it made sense to privatise
national assets, or to allow foreign multinationals to take control of
strategic industrial capabilities.
"I think there is little doubt that we will be
extremely cautious in the future around who do we trust with the
ownership of strategic national assets."
Gigaba compared the behaviour of SOEs with that of private
companies, saying SOEs invested their free cash to support growth.
"This is in strong contrast with the reality that
private companies are sitting on cash equivalent to 18% of GDP."
SOEs were also building new industrial capabilities,
contributing to skills training and involving local communities.
Gigaba recognised that SOEs had their problems, such as
inefficiency, not transforming fast enough, and not investing fast enough to
make up for the historic infrastructure gap.
"However, what is indisputable is that as government we
have the will and the intent to create businesses that are supporting our
long-term economic development agenda for the benefit of the society as a
Gigaba said the ANC supported a mixed economy approach where
both the public and private sectors played a vital role in support of economic
growth and the creation of equality.
"But the fundamental issue in determining whether the
state needs to make a direct investment in a commercial enterprise is whether
the private sector can be trusted to behave responsibly in developing a sector,
particularly if government regulatory capacity is weak," he said.