The ANC national executive committee (NEC) lekgotla this weekend will discuss how — and when — to move state-owned entities (SOEs) out of the department of public enterprises (DPE) and into their line ministries.
The proposed move is in line with a resolution taken by the party’s national conference in December, prompted by the electricity generation crisis facing Eskom, and is expected to eventually result in the power utility moved to the control of the department of minerals and energy.
The ANC lekgotla outcomes will then feed into a similar two-day cabinet gathering being convened by President Cyril Ramaphosa next week, at which the reconfiguration of his government will be discussed ahead of the State of the Nation address on 9 February.
But an actual move of the SOEs to their line ministries is not likely to take place in the short term, given the amount of work necessary to translate the conference resolution into reality.
Minister in the Presidency Mondli Gungubele told Mail & Guardian on Thursday that the three-day lekgotla would assess how resolutions — including moving Eskom to the department of mineral resources and energy — could be implemented.
“We expect the lekgotla to spend two days to look at implementation — with particular emphasis that this is the last year of the term of office. We expect the ANC lekgotla to approach this with a high level and sense of urgency,” he said.
Gungubele said their focus would be on the implementation of existing policy and addressing failings, rather than on introducing new policies, between now and the 2024 elections.
“People are not going to be excited about policy pronouncements of the ANC this year. They will only take us seriously on the practical differences we make in their lives, either making that difference or demonstrating with certainty that this change is going to happen,” Gungubele said.
“These are two indicators that people are going to vote for us or not. I expect this lekgotla to understand that this is an action year.”
The resolution on moving the SOEs to line departments was “not anticipated”, Gungubele said, which meant that an analysis had not yet been done as to whether the line departments were ready to perform the oversight role that would come with the entities.
The timelines for the process would be led by the president, based on the outcomes of an analysis of the effect — and the cost — of the move.
Gungubele noted that the 2017 resolution on the nationalisation of the South African Reserve Bank had not been implemented because “analysis led by the socio-economic cluster demonstrated that time was about everything”.
“These resolutions are always policy statements by the organisation and policy wishes of the organisation. Leaders assess when is the most appropriate time to do this. We will take a lead from the president and depend on the analysis of the cluster — what impact would this have as we sit now?” he said.
But inside the party two senior members have said that the resolutions must be fulfilled. One national executive member told the M&G that they would push for the fast tracking of the resolution this weekend.
“[Public Enterprises Minister] Pravin [Gordhan] staying or going is not about him being in the NEC. There was a resolution of the conference. And that’s where we must start. We can’t be selective. There is no one who doesn’t know of the resolution to step aside. Why isn’t everyone being told of the resolution to do away with DPE?
“We have commissions and reports that have reviewed the future of state-owned enterprises and where they are located. All these entities must go back to their departments,” said the senior member.
Meanwhile Gungubele stressed the importance of the entities maintaining their specialisation, transparency and accountability under the line ministries, should the move take place.
“It is going to be very important in the sense that you would have to make sure that the transparency, the accountability and the specialisation that comes with separating those things is not undermined by that measure,” he said.
“Those departments will have to be organised to ensure that those principles are not tampered with.”
The cost of the move still had to be ascertained, as did the effect on the staff members of the various entities, and the department of public enterprises itself, which would entail consultations with trade unions operating in the sector.
One of the major issues that has stopped the ANC from seeing through its Reserve Bank resolution is the costs associated with reorganising its ownership model.
Gungubele also responded to criticism regarding the slow implementation of Eskom’s restructuring, pointing out that the presidential state-owned enterprises council has done a thorough analysis of the difficulties faced by these entities.
“That process in advance, is it moving at a healthy speed? If you say you are not happy, I would respect that. I think we could do that faster, but there is a lot of work that the president has assured has been done,” the minister said.
“I think we are at the brink of subjecting all the entities into the proposals that come out of the SOE council.”
The council is developing a new approach to the government’s management of these entities, according to a document circulated by the treasury ahead of the World Economic Forum in Davos last week. Some will be retained, while others may be disposed of or consolidated, according to the document.
He also addressed the political fate of Gordhan, who has steered the department of public enterprises these past five years.
Gordhan has fielded criticism for the continued deterioration of state-owned entities — especially Eskom — under his watch.
In addition, the public enterprises minister did not stand to be elected on the ANC’s NEC at the party’s December conference, suggesting his days in Ramaphosa’s cabinet are numbered.
“All of us, our future is in the hands of the ANC,” Gungubele said, adding that all ministers will be assessed based on their performance. “Whatever the view of the organisation and the president is, we will align with that.”
Gungubele added that Eskom has distorted South Africa’s impression of Gordhan. “When we talk about Mr Gordhan, we are not talking about somebody who we should define through the current challenges of Eskom, which he has always confronted with bravery.”
Artmotion S.Africa
