The ANC’s national executive committee (NEC) lekgotla will this weekend discuss how – and when – to move state-owned entities (SOEs) out of the department of public enterprises (DPE) and into ministries.
The proposed step is in line with the resolution taken by the national conference of the party in December, prompted by the electricity generation crisis facing Eskom, and is expected to eventually result in the power utility being transferred to the control of the mineral and energy department.
The results of the ANC lekgotla will then be presented at the same two-day cabinet meeting with President Cyril Ramaphosa next week, where the reconfiguration of his government will be discussed before the State of the Nation address on February 9.
But the real transfer from BUMN to the ministries will not happen in the short term, because of the amount of work required to translate the conference resolutions into reality.
Minister in the Presidency Mondli Gungubele told Mail & Guardians there is a three-day lekgotla to assess how the resolution – including moving Eskom to the department of mineral resources and energy – can be implemented.
“We expect the lekgotla to spend two days to see the implementation – with special emphasis that this is the last year of office. We expect the ANC lekgotla to approach this with a high level and a sense of urgency,” he said.
Gungubele said the focus is on implementing existing policies and addressing failures, rather than introducing new policies, between now and the 2024 elections.
“People will not be excited about the ANC’s policy announcements this year. They will only pay serious attention to the practical difference we are making in their lives, making that difference or showing with confidence that this change will happen,” said Gungubele.
“These are two indicators that people will vote for us or not. I hope this lekgotla knows that this is the year of action.
The resolution to transfer BUMN to the line department “is not anticipated”, Gungubele said, which means that the analysis has not been completed whether the line department is ready to carry out the supervisory role that will come with the entity.
The timeline for the process will be led by the president, based on the results of an analysis of the effects – and costs – of the move.
Gungubele noted that the 2017 resolution on the nationalization of the South African Reserve Bank has not been implemented because “the analysis led by the socio-economic cluster shows that time is of the essence”.
“This resolution is always a policy statement by the organization and the organization’s policy. The leader determines when is the most appropriate time to do this. We will take the lead from the president and rely on the cluster analysis – what is the impact of this when we sit now? he said.
But within the party there are two senior members who say the resolution should be carried out. One of the members of the national executive told ing M&G that they will push to fast track the resolution this weekend.
“[Public Enterprises Minister] Pravin [Gordhan] stay or go not about him being in the NEC. There was a conference resolution. And that’s where we have to start. We can’t choose. There is no one who does not know the resolution to get away. Why isn’t everyone given a resolution to eliminate DPE?
“We have a commission and a report that reviews the future of state-owned enterprises and where they belong. All these entities must return to the department,” said the senior member.
Gungubele stressed the importance of the entity maintaining specialization, transparency and accountability under the ministry, if the move is implemented.
“It will be very important because you have to make sure that the transparency, accountability and specialization that can be separated are not destroyed by these measures,” he said.
“The department needs to be regulated to ensure that these principles are not compromised.”
The cost of the move still needs to be ascertained, as well as the effect on staff members of the various entities, and the public company department itself, which will require consultation with trade unions operating in the sector.
One of the main issues that stopped the ANC from looking at the Reserve Bank resolution was the cost associated with the reorganization of the ownership model.
Gungubele also responded to criticism of the slow implementation of Eskom’s restructuring, pointing out that the president’s board of state-owned enterprises has carried out a comprehensive analysis of the difficulties facing the entity.
“The process was before, did it move quickly? If you say you don’t like it, I will respect it. I think we can do it faster, but there is a lot of work that the president promised,” said the minister.
“I think we are on the verge of applying all entities to the proposal that comes out of the BUMN board.”
The council is developing a new approach to the management of these entities, according to a document distributed by the treasury ahead of the World Economic Forum in Davos last week. Some will be retained, while others may be dropped or merged, according to the document.
He also spoke about the political fortunes of Gordhan, who has led the department of public enterprises for the past five years.
Gordhan has drawn criticism for the continued deterioration of state-owned entities – particularly Eskom – under his watch.
In addition, the public enterprises minister could not be elected to the ANC’s NEC at the party’s December conference, saying Ramaphosa’s days in the cabinet were 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 organization and the president, we will align with it.”
Gungubele added that Eskom had damaged South Africa’s impression of Gordhan. “When we talk about Mr. Gordhan, we are not talking about anyone who has to be established through the challenges of Eskom today, which he has always faced with courage.”