South Africa is set to get a new state-owned company, but there are concerns that it could just end up becoming another government failure.
Mavuso said that a new state-owned holding company that is fully empowered to turn around the government’s flailing SOEs and bring in private shareholders would be welcomed. “It needs a board of accomplished, experienced professionals with extensive corporate expertise and not political cronies. In turn, it must have authority over the boards it appoints to manage the SOEs, and to monitor performance and ensure delivery.”
Mavuso said that it is positive that the new draft legislation allows the holding company to have oversight over SOEs and that it provides for the corporatisation of state enterprises that are not yet legally companies in line with the Companies Act.