Deputy President Cyril Ramaphosa has set his eyes firmly on the country’s State-Owned Enterprises (SOEs) saying South Africa’s economy can only stabilise if there is stability at these critical entities.
There has been concerns in recent months over governance and claims of financial mismanagement issues at some state-owned companies including Eskom, Transnet and SAA, among others, with investors and ratings agencies displaying discomfort over how these entities are operating.
“The problems Eskom is facing are huge. The Minister of Finance is seized with this matter on an hourly basis. If there is anything that is top of mind not only for the minister but for a number of us in government, it is Eskom,” the Deputy President said on Thursday.
He was also concerned about a number of issues that affect SOEs in general.
“We are all concerned about our own State-Owned Enterprises. There needs to be rigorous oversight. There should not be interference as to who you appoint as the gardener or the lady or gentleman who makes tea or how procurement should be done. The challenges at SOEs need to be resolved as in yesterday,” he said.
Deputy President Ramaphosa was speaking at a breakfast meeting with business in Johannesburg ahead of the departure of the South African delegation to this year’s World Economic Forum (WEF) meeting, taking place in Davos, Switzerland, from 23 to 26 January.
The purpose of the breakfast meeting was to allow government and business to discuss the message they wish to take to Davos.
South Africa goes to the WEF meeting just weeks after Deputy President Ramaphosa was elected leader of the governing party, the ANC, positioning him as a possible President of the country after the 2019 elections.
“The one overriding concern that people had leading up to the conference of the governing party was political uncertainty. We now have a new leadership that has been chosen that will take the country forward,” he said on Thursday.
The new leadership, he said, will provide political and policy certainty at the time many South Africans are expressing doubt over the country’s growth prospect in light of increasing unemployment and rising costs of living.
“We are going to Davos to sell South Africa. We are going there to say we have a leadership that is providing political certainty and we will be telling the investors that South Africa is open to business,” he said at the meeting attended by several ministers, including Finance Minister Malusi Gigaba.
The Finance Minister also held a press conference in which he moved to assure investors that problems at State-Owned Enterprises, Eskom in particular, were being attended to.
“The problems at State-Owned Enterprises require immediate action because they raise a fiscal risk and we in the National Treasury are raising those risks. We are not going to wait until the end of term of this current administration to address these challenges. It’s going to be urgent,” Minister Gigaba said.
He said despite the challenges, the economy was showing signs of recovery and resilience.
South Africa’s GDP grew by 2.0 per cent quarter on quarter in the third quarter of 2017, from upwardly revised 2.8 per cent in the second quarter. The agricultural sector was the largest contributor with growth accelerating by 44.2 per cent and contributing 0.9 percentage points to quarter on quarter GDP growth, according to Treasury.
Manufacturing was up 4.3 per cent quarter on quarter in the third quarter and contributed a further 0.5 percentage points. Growth in the sector was mainly driven by rising production in export-oriented sectors such as petroleum, chemical products, rubber and plastic products, metal and steel.
Deputy President Ramaphosa suggested that while in Davos, South Africa would be casting its nest across the globe to attract investors and that over the next year work would focus on economic recovery and stability.
“Our most important task right now is to address the challenge of jobs, inequality and poverty and we can only address those challenges by getting our economy to recover. We have to work together to ensure there is economic recovery, government cannot do it alone nor can the private sector do it alone.
“We want to make South Africa an attractive country for investment and we must deal with those issues that stand in the way of investments flowing into our country. As we go to Davos, our message is simple and it is to increase investor confidence in our country and I believe we can do it,” said the Deputy President.
The WEF annual meeting gathers leaders from all sectors of society to discuss the global economy and look for solutions to challenges through public-private co-operation.
The South African team to the meeting will be led by the Deputy President with the rest of the delegation comprising Ministers and business leaders.