Home  »  Articles   »   Challenges Hindering SOCs Under the Spotlight

Challenges Hindering SOCs Under the Spotlight

June 6, 2019

The Presidency

6 June 2019

Challenges limiting the ability of State-Owned Companies (SOC) to drive economic growth and development include inadequate capitalization, poor governance, outdated legislation and political interference.

President Ramaphosa spelled this out following a meeting with the chief executives of over 20 SOCs in Pretoria.

In a statement, the presidency pointed out that the meeting was held to discuss the contribution SOCs can make to economic revitalisation and social development.

In attendance were representatives of the following SOCs: Acsa, Alexkor, Armscor, ATNS, Central Energy Fund, DBSA, Denel, Eskom, IDC, Land Bank, Necsa, PetroSA, Prasa, Rand Water, SA Express, SAA, SABC, Safcol, Sanral, SA Post Office, Trans-Caledon Tunnel Authority, Transnet and Umgeni Water.

The president confirmed that government remained committed to work with the leadership of SOCs and stakeholders to urgently address the shortcomings.

The meeting was called to “hear the views of the executive leadership of strategic state entities on the challenges they confront in implementing their mandates and the opportunities they have identified to strengthen this sector”.

Challenges raised by SOCs included the need for a better definition of the respective mandates of SOCs and more supportive government policy.

Other concerns included an inappropriate legal and regulatory environment within which SOCs operate and challenges around the exercise of oversight by respective ministers and inconsistency in the appointment of boards.

According to the presidency, inputs made by the SOC executives at the meeting will form part of the initial programme of the Presidential SOC Council to “provide political oversight and strategic management to reposition and revitalise SOCs as catalysts for economic growth and development”.