PRESIDENT JACOB ZUMA’S decision to appoint yet another committee to review State-owned enterprises (SOEs) – billed as one that will provide an independent perspective – hasn’t only raised eyebrows in his Cabinet but also reinforced Zuma’s political vulnerability and, therefore, his being unable to stamp his authority, especially when it comes to the obvious but tough decisions that need to be made for South Africa’s SOE sector.
There’s no doubt SOEs – several of which are dealing with leadership and financial crises that threaten to undermine SA’s State-sponsored and SOE-driven infrastructure spending programme – have become an increasing source of tension in the ANC itself, as well as between the ruling party and its labour and communist alliance partners. Aside from differences of opinion about how SOEs should be run, how they should balance development and profit objectives and what role the State should play in supporting those, the real nub of the SOE problem is the degree to which they’ve become politicised.
That, plus the paralysing consequences of politicisation, was clearly demonstrated last year when Communications Minister Siphiwe Nyanda and Justice & Constitutional Development Minister Jeff Radebe boldly stepped into Public Enterprises Minister Barbara Hogan’s turf by publicly dismissing disciplinary action against Siyabonga Gama and calling for him to be installed as Transnet CEO. Hogan has yet to appoint a CEO for Transnet.
Pan African Capital Holdings CE Iraj Abedian says what needs to be done to the embattled SOE sector isn’t rocket science. There’s nothing new to discover about why SOEs find themselves in the precarious positions they’re in. “What needs to be done isn’t to subject them to more politics or debates about privatising them. It’s not about reinventing the wheel (by investigating options, such as housing them under one specialist ministry or returning them to different line function ministries, as they were before, and which local and international research has already proved not to be ideal). The key is to subject them to a process of rigorous professionalisation,” says Abedian.
Centre for the Study of Democracy associate Eusebius McKaiser agrees and adds: “You do that not by deploying a cadre to head Transnet Freight Rail but rather appointing someone with a nerdish, career-long obsession with trains and goods. That’s the sort of person who’ll get excited about what business teachers call spaghetti charts and figuring out how to untangle them. Such folks have the know-how to help a team think through the inefficiencies that prevent a place such as Transnet from having trains that run at the optimal turnaround time when they take coal to customers, such as Eskom.”
While Zuma has explicitly ruled out the possibility of putting an end to cadre deployment, Hogan’s reality is that although officially in charge of SOEs she’s been shot down by critics in the ANC and in Cosatu for most statements she’s made about the subject. Though the Hogan-led SOE review will continue – it also includes a review of executive salaries – her office wouldn’t answer questions about how Zuma’s new independent SOE review would dovetail or enhance the inter-ministerial review. All questions were referred to the Presidency.
Aside from the Hogan-led review, the role SOEs play in the economy will be key to Economic Development Minister Ebrahim Patel’s investigation into a new economic growth path for SA. Ditto the National Planning Commission’s work in nailing down a long-term development vision for SA, including plans, costs and budgets detailing how exactly to achieve that.
While Zuma’s office confirmed objectivity is the key reason in conducting yet another SOE review by people outside Government, in a recent interview Zuma suggested he wouldn’t be able to run with the proposals provided by Cabinet reviews/research and said: “That’s precisely why we want other people to do the review and not people who have got interests. For example, if they’re done by the departments (which) have views that will be subjective.”
Of course, that begs questions about what Zuma is going to do when all these reviews are finished, where it leaves Hogan and whether a co-ordinated SOE plan will emerge before his first term is up, if at all. However, Zuma’s capacity to be decisive in Government depends on how successful he is as leader of the ANC.
Political analyst Aubrey Matshiqi says Zuma was politically compromised before even being elected as ANC president at the Polokwane conference. As a result, he’s not only been unable to fulfil the task he was elected to do in the ANC – stabilise it – he’s also become part of the problem. That means when it comes to powerful, political and personal interests that continuously push various agendas in his Cabinet and in the ANC alliance (particularly when it comes to SOEs) Zuma is unable to enforce decisions that are in the best interest of SA.