9 May, 2013 13:44

Should Public Enterprises take over SABC and PetroSA?

If today’s Business Report is to be believed, Public Enterprises Minister Malusi Gigaba will add public broadcaster SABC and state oil company PetroSA to his portfolio, which already includes troubled SAA and Eskom. Is this much more than a shuffling of deckchairs on the Titanic, or can one minister succeed in delivering better results from two national embarrassments, which have been repeatedly the subject of scandal and mismanagement?

Expert views

1. Lavan Gopaul from 28E Capital:

The government has missed an opportunity to privatise these public enterprises. Successive managements and boards have resulted in an ungovernable set of institutions. Most of them have been just breaking even or making losses. We saw instances in the Thatcher regime in the UK when the privatisation of public enterprises led to job creation and profits for shareholders. When one considers the fate of the SABC, of Telkom and SAA, it’s clear the national government is not in a position to actively compete in an entrepreneurial space. The missed opportunities to privatise mean that South Africa loses out as a global operator.

2. Mike Schussler from economists.co.za:

Malusi Gigaba has been a powerful minister. One can expect him to bring a bit more stability to the SABC. PetroSA is also in a bit of a mess. You could argue that the SABC should be run by a trust, as a public broadcaster, independent of politics. Petro SA should be in private hands, although there is an argument that South Africa’s strategic oil reserves should remain under government control. PetroSA is active in Africa, in the same way as a private player, and should be regarded as such.

3. SACCI CEO Neren Rau:

We recently did a study of state-run enterprises, and there are enormous challenges in terms of their governance. That is a key thing that Minister Gigaba can contribute. We have seen Board members being replaced without being informed, and CEOs sometimes not being informed about changes in their Boards. He can improve relations between the shareholder and the entities, and improve the governance of these entities.

Conclusion

Clearly there is a problem with dysfunctional and poorly-run state enterprises, and the appointment of a well respected minister to oversee PetroSA and the SABC would be a step in the right direction. But it doesn’t address the more fundamental question of whether the State should be in charge at all. Of course, we need the right regulatory environment, but politicians and civil servants in South Africa do not have a proud record in overseeing businesses.

Tweet of the Day

Grumpy Grandma (@lnternetGrandma) I want to have 3 kids and name them Ctrl, Alt, and Delete. Then if they f**k up I will hit them all at once…

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