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Gigaba promises to rein in SOEs

Dec 06 2010 12:08
Pretoria - The public enterprises department will exercise a "hands-on, robust” approach to ensure that state-owned-enterprises (SOEs) meet policy standards, Public Enterprises Minister Malusi Gigaba said on Monday.

Part of the problem with SOEs in South Africa is that there are more than 400 of them, and because they straddle other departments and tiers of government, only nine fall within ambit of the department of public enterprises, Gigaba told an international benchmarking seminar in Pretoria.

Because of that, there is no common shareholder governance model, resulting in a reliance on "ad hoc instruments" that may not be suitable for SOEs.

Gigaba also spoke of a need to ensure that parastatals have stable boards and management, and that they are financially viable.

“In this regard, we have to ensure that there is alignment between the national interest and commercial interest mandates.”

Gigaba said his department would revive efforts to provide a holistic approach to SOE governance through a dialogue on government shareholder management.

From a governance and oversight perspective, Gigaba said they would interrogate and provide guidance on, among other things, the optimal funding structures for projects to be undertaken by parastatals, the best governance structure for SOEs under the department's care, and guidance for the recruitment and appointment of board members.

The aim is to inspire economic growth and meet people's demands for a better life.

The two-day seminar is hosted by the presidential review committee on SOEs, in collaboration with the Organisation for Economic Cooperation and Development.


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