CAPE TOWN, June 26 (Xinhua) -- Despite their financial woes and poor management, state-owned enterprises (SOEs) in South Africa have a critical role to play in driving economic growth and transformation, President Cyril Ramaphosa said on Wednesday.
"We disagree with the view that the most effective and efficient way to provide services to our people is through the private sector," Ramaphosa said, refuting growing calls to privatize SOEs, some of which are on the brink of bankruptcy.
Every single day, public entities are providing water, electricity, waste removal services, road maintenance and a myriad other essentials to South Africans, the president told Members of Parliament during a debate on his State of the Nation Addressed delivered earlier this month.
Ramaphosa cited the example of the Post Office which took over the payment of social grants last year.
Before taking on this responsibility, in April 2018, only 31,000 social grant beneficiaries were paid through the Post Office.
Last month, 7.8 million beneficiaries were paid through the Post Office, representing over 70 percent of all beneficiaries, according to the president.
The successful takeover of the distribution of social grants by the Post Office is a clear demonstration that government institutions do have the capacity and capability to effectively implement projects of this magnitude, said Ramaphosa.
Referring to concerns over poor performance of some SOEs, the president said the government has done much to address governance challenges at several SOEs and has been decisive in tackling corruption and state capture.
The government, he said, is supporting companies like South African Airways and weaponry manufacturer Denel as they seek to manage their dire financial positions and work to implement sustainable turnaround strategies.
"As we address challenges at specific SOEs, we are also working towards a new SOE landscape in which state owned companies have the expertise, leadership and appropriate financial models to fulfill their respective mandates," said Ramaphosa.
In its recent engagement with the chief executives of some of the country's largest SOEs, the government has identified the key challenges they faced and the impediments towards the effective implementation of their respective mandates, according to Ramaphosa.
"We have agreed that we will work together through the Presidential SOE Council to address all the issues they raised," he said.
The government is also closely engaged with the situation at cash-strapped electricity utility Eskom, assisting the entity with the implementation of its nine-point-plan, putting in place a world-class executive team, strengthening the board and setting out in detail a comprehensive road-map for Eskom into the future, Ramaphosa said.
The measures that the government announced in February to end load shedding and place Eskom on a sustainable financial and operational path have seen improvements, he said.
