Monday, January 24

The application of the lax law SA hinders the change of state companies


South Africa’s attempt to reverse state-owned companies systematically looted during the government of former President Jacob Zuma is being undermined because those responsible for the looting are not being held accountable.

Enforcement of the law is proceeding at “a fairly relaxed pace,” Public Business Minister Pravin Gordhan, who oversees most of the largest state-owned firms, said in an interview on Nov. 26. “We haven’t increased the risk factor of getting caught and facing the consequences enough.”

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The government estimates that more than R500 billion ($ 31 billion) were stolen from its coffers during Zuma’s nine-year tenure, with energy company Eskom and rail and port operator Transnet among the targets.

Witnesses who have testified before a judicial commission established in 2018 to investigate the robbery allege that it was largely led by members of the Gupta family and took place with the tacit consent of Zuma. The Guptas, who left the country, and the former president, who was released on medical probation following his conviction and imprisonment for defying a court order to testify before the panel, deny wrongdoing.

President Cyril Ramaphosa, who succeeded Zuma in 2018, has identified the fight against corruption as a top priority. While it has taken steps to strengthen the National Fiscal Authority and modernize crime fighting units, they still have a long way to go to reduce a huge backlog of cases and address new ones.

‘Lack of urgency’

There are scattered examples of people who robbed from state entities that are being charged and prosecuted, but “there are also many waiting in line,” Gordhan said. “If there is something that keeps me awake, it is the lack of urgency on the part of the forces of order, because we have to act as a joint state in all these matters.”

The poor performance of state-owned companies has slowed production and economic growth. Eskom has subjected the country to more than a decade of continuous blackouts, while Transnet lacks the capacity to transport sufficient shipments of iron ore and coal and its container ports are ranked by the World Bank and IHS Markit among the worst performing in the world. world.

The government is considering establishing a new management model for state-owned companies to improve their performance and is selling a majority stake in the state airline that could serve as a model for other partnerships with private investors, according to Gordhan.

However, the focus should be on “changing, transforming and repositioning vital entities like Eskom to serve the national interest,” he said. “That is the goal, not what you own and who owns it should matter. The rest is cheap politics. ”

© 2021 Bloomberg


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