Monday, June 21, 2010

South Africa: Zuma Shelves Cabinet Review of State Entities

Jacob Zuma, former vice president of South Africa.

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Luphert Chilwane

THE Presidency has halted a review of state-owned enterprises by Public Enterprises Minister Barbara Hogan and Finance Minister Pravin Gordhan, which was supposed to have answered crucial questions about their mandate and operation.

A non-government panel, appointed by President Jacob Zuma after Ms Hogan and Mr Gordhan had already been asked by the Cabinet to do the job, will now conduct the only such review. This is despite Mr Zuma promising - when he announced his intention of appointing the external panel in March - that both reviews would continue and that both sets of findings would be considered by the Cabinet.

The role of state corporations is a hot topic in the tripartite alliance, and a source of tension among African National Congress (ANC) leaders.

The party's leftist allies have been critical of the running of many of the entities, the composition of their boards, and their serving business interests instead of the state's development needs. There are also concerns that state entities have served as vehicles for enrichment for party leaders through lucrative tenders.

Leadership crises at Transnet and Eskom saw ANC leaders and Cabinet ministers pitted against one another. At the time, Ms Hogan spoke out against political meddling in state-owned enterprises, arguing that their CEOs should be held accountable only by their boards.

The dropping of her investigation, which was also intended to report on the future role and mandate of state corporations, could mean that her views on corporate governance and a hands-off role for politicians will not win out.

South Africa: Zuma Shelves Cabinet Review of State Entities

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