The first phase of reform for
state-owned entities (SOEs) is
“progressing well” and the Inter-
Ministerial Committee (IMC)
– established to drive SOE reform –
has submitted proposals to Cabinet
which include a new
government funding
model that leverages
off private sector
participation.
Addressing a
parliamentary
question last week,
deputy president
Cyril Ramaphosa
said that the first
phase of reform
was focused on the
major commercial
SOEs – such as
Transnet – that
were “the backbone of SA’s
infrastructure development” based
on their potential to contribute to
re-industrialisation.
“There are proposals for financial
support to some SOEs as part
of the IMC’s draft Shareholder
Policy, though providing financial
support to SOEs must be matched
against the entity’s potential to
remain sustainable and wean itself
off government support,” said
Ramaphosa.
He said the IMC was considering
various funding
instruments,
including leveraging
off the private
sector participation
framework on which
National Treasury
was engaging with
various departments
and state owned
enterprises.
The proposed
private sector
framework provides
guidance on how to
involve the private
sector in new public infrastructure
programmes.
The IMC, chaired by Ramaphosa,
was established as part of a greater
14-point plan by the Minister of
Finance, Malusi Gigaba, to rebuild
investor confidence on the back of
downgrades by ratings agencies.
INSERT & CAPTION
Providing financial
support to SOEs must
be matched against
the entity’s potential
to remain sustainable.
– Cyril Ramaphosa
