Economy at centre of Ramaphosa’s maiden Sona – announces measures to clean up SOEs

President Cyril Ramaphosa placed the recovery of the battered economy at the centre of his maiden state of the nation address.

February 16, 2018. President Cyril Ramaphosa deliver the State of the Nation Address in parliament, Cape Town. PICTURE: ESA ALEXANDER/SUNDAY TIMES

Delivering his first SONA to a joint sitting of Parliament on Friday night‚ Ramaphosa said the country was entering “a new era” in which government would make drastic changes in its affairs.

Ramaphosa said government would urgently overhaul the appointments of oversight boards of state-owned enterprises‚ which up to now have been plagued by allegations of corruption‚ financial mismanagement and maladministration.

State-owned firms such as Eskom‚ SAA‚ Denel and Transnet‚ have recently been making headlines for all the wrong reasons to the extent that the power utility and the national carrier are teetering on the brink of bankruptcy.

Ramophosa‚ who on Thursday took over from former president Jacob Zuma following his resignation on Wednesday‚ said non-executive directors would no longer be allowed to take part in procurement of SOEs.

This is seen as a response to revelations that board members of parastatals such as Eskom had irregularly influenced the awarding of multi-million rand contracts to politically connected business people.

February 16, 2018. President Cyril Ramaphosa deliver the State of the Nation Address in parliament, Cape Town. PICTURE: ESA ALEXANDER/SUNDAY TIMES

Ramaphosa said government would also be working with the office of the Auditor-General to tighten the auditing of the financial books of SOEs.

“Many of our state-owned enterprises are experiencing severe financial‚ operation and governance challenges‚ which has impacted on the performance of the economy and placed pressure on the fiscus.

“We will intervene decisively to stabilise and revitalise state-owned enterprises.

“The recent action we have taken at Eskom to strengthen governance‚ root out corruption and restore its financial position is just the beginning.

“Government will take further measures to ensure that all state-owned companies fulfil their economic and developmental mandates.

“We will need to confront the reality that the challenges at some of our SOEs are structural – that they do not have a sufficient revenue stream to fund their operational costs.

“These SOEs cannot borrow their way out of their financial difficulties‚ and we will therefore undertake a process of consultation with all stakeholders to review the funding model of SOEs and other measures.

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“We will change the way that boards are appointed so that only people with expertise‚ experience and integrity serve in these vital positions.

“We will remove board members from any role in procurement and work with the Auditor-General to strengthen external audit processes.”

The new president also said he would be convening an investment conference in a bid to win foreign investors back into the country.

He said he would also be establishing a Presidential Economic Advisory Council to help find solutions to revive the economy.

“We have to build further on the collaboration with business and labour to restore confidence and prevent an investment downgrade.”

By: Thabo Mokone – TimesLIVE

Source: TMG Digital.

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