The Congress of South Africa Trade Unions (Cosatu) has given approval to the surreptitious disbandment of the State-owned enterprises (SOEs) portfolio which barely went noticed as President Cyril Ramaphosa announced that it would now report directly to the Presidency with reference to line departments on policy matters while government reviews its shareholder position in the entities.
Cosatu Spokesperson Matthew Parks said it had long advocated for the department's closure as part of streamlining the government and ensuring greater coherence.
“Having two or three ministers covering one entity just created chaos. The Department of Public Enterprises only supervised seven state-owned enterprises and so its continuation did not make sense,” he said, pointing toward the SOE shareholder management bill, tabled at Nedlac and now before Parliament, as the best outcome as it would establish a council to oversee the entities.
This is as the South African Wind Energy Association (SAWEA) said it supported the separation of Mineral Resources and Energy into two separate ministries as it enables the country to prioritise energy security with a special focus on electricity.
SAWEA CEO, Niveshen Govender, said challenges remain a concern, particularly ahead of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) Bid Window 7 submission deadline and the dwindling grid capacity in wind-rich areas.
“We have high expectations from the newly formed Ministry of Electricity and Energy to work with industry and overcome sector challenges, including grid constraints, regulatory and policy uncertainty, as well as local manufacturing limitations,” Govender said.
“To mitigate these, there is a critical need to accelerate the integration of wind energy as part of the county’s energy mix and requires policy and strategic intervention to ensure an affordable, stable and reliable electricity supply across South Africa.”
The Federation of Unions of South Africa (Fedusa), which expressed concerns with the expanded Cabinet, said it would encourage the new administration to invest in bulk infrastructure, such as transportation, energy, and water supply.
“The government should prioritise projects that have a high impact on economic growth and job creation. Tackling the unemployment crisis, especially among the youth, should be a key focus of the administration,” Fedusa's general secretary Riefdah Ajam said.
Fedusa said it was encouraged by the appointments in the economic cluster of people it trusts were progressive and had capacity to deal with the tasks ahead.
The Black Business Federation (BBF) said with the Cabinet appointments made, it anticipated the proposed National Dialogue at which it would make a case for the monitoring and evaluation of government ministries to ensure that those in the economic cluster are effectively implementing progressive policies to support economic growth and development.
It said priorities for the seventh administration should be fine tuning policies that promote international trade and attract foreign direct investment to stimulate the growth of SMMEs, streamlining processes and providing support services to SMMEs and such as access to finance to facilitate the growth and sustainability of small and medium-sized enterprises and implementing measures to reduce the overall cost of doing business in the country.
“We welcome the establishment and urgent implementation of a monitoring and evaluation portfolio to oversee all public and private partnership (PPP) business activities,” said BFF secretary general, Wanda Jaca.
Deal Leaders International, a specialist M&A advisory firm, warned that the new Cabinet distinguishes growth policies from developmental ones.
“Growth is a quantitative increase in numbers. Development is a qualitative improvement in the output of the economy which is what South Africans are crying out for. Good news is that apart from the Minerals and Petroleum portfolio, most important economic ministries have at least seen a modest improvement, and some a substantial improvement,” DLI's CEO Corporate and Strategy Andrew Bahlmann said.
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