The door has been opened – albeit a wee bit – for a more substantial role for the private sector in state-owned enterprises. President Cyril Ramaphosa said in his reply to the state of nation address debate in Parliament that, where appropriate, minority investors would be drawn into some of the state-owned enterprises
Ramaphosa said that, where appropriate, a role for the private sector in a strategic equity partner role would be considered. It would depend on which state-owned enterprise. “We are developing an overarching SOE (state owned enterprise) strategy to support a growth trajectory for our state-owned enterprises.”
A new centralised ownership model would allow for better strategic alignment, improved coordination and better oversight. “It is proposed that this include a state-owned company coordinating council,” he said. This would be responsible for strategic direction.
The new ownership model would incorporate new methods of function “which could include” a shift to a greater mix of debt and equity finance. “Where circumstances are suitable and where the developmental function of an SOE is not compromised, there may be opportunities to involve strategic equity partners as minority investors in some of our SOEs.”
He said the government was going to be meeting chief financial officers and CEOs of the state-owned enterprises to discuss their plans for stability and promotion of manufacturing as well.
He said the coordinating council, chaired by the president of the country – himself – would coordinate the work on all state-owned enterprises.
He also opened the door to the establishment of a sovereign wealth fund. In this regard, South Africa would consider the experiences of other countries including Singapore, a free enterprise country, and China, a communist country with a form of state capitalism.
“We will look at the experiences of countries, such as Singapore… Norway… China… which have all successfully built sovereign wealth funds which act as custodians of the nation for future generations.”