During last night’s State of the Nation Address, President Cyril Ramaphosa acknowledged that state-owned enterprises (SOEs) and local government and the state’s greatest weaknesses. Many SOEs are struggling with significant debt, under-investment in infrastructure, the effects of state capture and a shortage of skills, the President said.
To address this challenge, “We will implement the recommendation of the Presidential SOE Council to establish a state-owned holding company as part of a centralised shareholder model that will ensure effective oversight of SOEs,” he said.
He has also instructed the Presidency and National Treasury to work together to rationalise government departments, entities and programmes over the next three years. National Treasury estimates that the government could achieve a potential saving of R27 billion in the medium term if it deals with overlapping mandates, closes ineffective programmes and consolidates SOEs where appropriate.
As for local government, the President said poor performance in many local governments remains an area of concern. “Too many of our municipalities, 163 out of 257, are dysfunctional or in distress due to poor governance, ineffective and sometimes corrupt financial and administrative management, and poor service delivery.”
For this reason, the government is implementing a number of interventions to address failures at local government level and improve basic service delivery. These include enhancing the capacity of public representatives and officials, maintaining and upgrading local infrastructure, and invoking the powers of national government to intervene where municipalities fail to meet their responsibilities.
A professional public service staffed by skilled, committed and ethical people is critical to an effective state and ending corruption, patronage and wastage. In response to the State Capture Commission and in line with the framework for the professionalisation of the public service, integrity assessments will become a mandatory requirement for recruitment to the public service and entry exams will be introduced.
“We are amending legislation and strengthening the role of the Public Service Commission to ensure that qualified people are appointed to senior management positions and to move towards creating a single, harmonised public service,” the President said.
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