State-owned enterprises of South Africa

In South Africa the Department of Public Enterprises is the shareholder representative of the South African Government[1] with oversight responsibility for state-owned enterprises in key sectors. Some companies are not directly controlled by the Department of Public Enterprises, but by various other departments. Further, not all state owned entities are registered as companies.

State-owned enterprises play a significant role in the South African economy. In key sectors such as electricity, transport (air, rail, freight, and pipelines), and telecommunications, SOEs play a lead role, often defined by law, although limited competition is allowed in some sectors (i.e., telecommunications and air). The government's interest in these sectors often competes with and discourages foreign investment.

The Department of Public Enterprises minister has publicly stated that South Africa's SOEs should advance economic transformation, industrialization and import substitution. DPE has oversight responsibility in full or in part for six of the approximately 700 SOEs that exist at the national, provincial, and local levels: Alexkor (diamonds), Denel (military equipment), Eskom (electricity generation), Transnet (railway transport and pipelines) South African Express, South African Forestry Company (SAFCOL) (forestry), South African Broadcasting Corporation. These seven SOEs employ approximately 105,000 people. The states share of the investment was 21% while private enterprise contributed 63% (government spending made up the remainder of 16%). The IMF estimates that the debt of the SOEs would add 13.5% to the overall national debt.

History

Many state-owned firms were established during the apartheid era to counter the impact of international sanctions against the country.[2] The ANC government initially sold stakes in the companies, and lowered import tariffs. Those measures were reversed following opposition from COSATU and the South African Communist Party.[2] By 2007, an alliance of unions and leftist factions within the ANC had unseated President Thabo Mbeki, replacing him with Jacob Zuma.[2] The new ANC policy aimed at expanding the role of SOEs in the economy, following the example of China.[2]

Although in 2015 and 2016, senior government leaders discussed allowing private-sector investment into some of the more than 700 state-owned enterprises and recently released a report of a presidential review commission on SOE, which called for nationalization of SOEs, no concrete action has been taken on the topic yet.[3]

Table list

The Public Finance Management Act distinguishes between three types of public entities. Schedule 1 entities compromise Constitutional Institutions including the Independent Electoral Commission and Public Protector among others. Schedule 2 entities are listed as Major Public Entities and have greater autonomy than Schedule 3 entities. Schedule 2 entities are listed below. Schedule 3 entities are subdivided into:

• National Public Entities - which generally function as specialised agencies or not-for-profit organisations such as the Companies and Intellectual Property Commission, the Human Sciences Research Council and the Road Accident Fund;
• National Government Business Enterprises - which function as profit-seeking businesses including the Council for Scientific and Industrial Research, Passenger Rail Agency of South Africa and Rand Water;
• Provincial Public Entities - which have a provincial focus and function as provincial agencies such as the Gautrain Management Agency and various provincial gambling and liquor boards;
• Provincial Government Business Enterprises - which are profit-seeking businesses controlled by provincial government and includes the Richards Bay Industrial Development Zone and the East London Industrial Development Zone

Full list

There are currently 108 State Owned Enterprises in South Africa[20]

• Accounting Standards Board
• Agricultural Research Council (ARC)
• Air Traffic and Navigation Services Company
• Airports Company South Africa (ACSA)
• Alexkor Limited
• Armaments Corporation of South Africa (ARMSCOR)
• Blind SA
• Brand South Africa
• Breede-Gouritz CMA
• Broadband Infraco
• Broadcasting Complaints Commission of South Africa (BCCSA)
• Cape Town International Airport
• Central Energy Fund (CEF)
• Commission for Conciliation, Mediation and Arbitration

See also

• Minister of Public Enterprises
• Department of Public Enterprises
• List of companies of South Africa

External links

• Index of all South African state owned enterprises