South Africa

SA parastatals’ bottomless mess

By Khadija Patel 15 March 2013

The chaos currently gripping the SABC boardroom is similar to the challenges of the country’s other parastatals, but it also points to the greater challenges of governance in South Africa. A challenge in which Jacob Zuma’s administration is finding little success. By KHADIJA PATEL.

“You are South African, right? Well, look at your country before talking about us.”

This was one Kenyan’s response to a South African’s attempt at satire of elections in Africa.

The retort for South Africans to be more attentive to their own troubles before commenting on the foibles of others was, however, not entirely without merit.

A look through South African news media in recent weeks reveals a country swaying precariously between one crisis and the next.

Perhaps we’re not exactly on the brink of some cataclysmic implosion. South Africa, we’d like to assure Kenyans, is quite all right. (Well, it’s all right if you’re lucky enough to have a job, medical insurance, running water and an electricity supply you can actually pay for. But we digress. )

But the fact remains, we have some daunting troubles. On Thursday, notes from a Cabinet meeting revealed that Cabinet “has noted with concern the recent developments at the SABC, SAA and Eskom”. It added that the line ministers had been mandated to engage with the respective institutions and report back to Cabinet as soon as possible.

One such line minister, Dina Pule, the Minister of Communications, told SABC radio that Hlaudi Motsoeneng, the acting COO who was axed two weeks ago, would remain in the position because the board was not properly constituted when it met to make the decision to remove him. She said Motsoeneng’s removal was actually illegal.

“I said to them: ‘Please, board, if you want to make that decision, go back and regularise your meeting and regularise your decision.’ Once they do that, I do not have a problem,” Pule said in an interview on SABC radio.

And as public condemnation of the minister’s interference in the SABC boardroom emerged, Pule’s spokesperson Siya Qoza said, “Decisions about the executives of the SABC are made by the SABC board and not the minister.”

Another government spokesperson, Mayihlome Tshwete, spokesperson for the department of public enterprises, was puzzled by public condemnation of the minister’s interference at the SABC.

“People complain about parastatals, the shareholder intervenes and then people complain about the shareholder intervening,” he said on Twitter.

The South African penchant for complaining quite aside, the intervention of the minister in the fracas at the public broadcaster demonstrates as well one of the greatest problems with the governance structures of parastatals.

Government is the shareholder, appoints the board and also performs an oversight function through Parliament or the department of public enterprises. In this maze there seems to be little clarity on who exactly is responsible when a crisis hits. The successful governance of parastatals requires clarity about the roles and responsibilities of all parties involved.

When Daily Maverick spoke to the chairperson of the Parliamentary Portfolio Committee on Communications, Eric Kholwane, last week, he argued that many of the problems currently facing the SABC board should actually have been addressed by Pule and not Parliament.

The beginning of the way forward for the SABC appears to lie in clarifying who among the board, the Parliamentary oversight committee and the minister is responsible for what. And once each stakeholder knows what exactly they are responsible for, perhaps the broadcaster may be on its way to securing some semblance of accountability.

Proper accountability for parastatals means being accountable for the management of public money and for the performance of the organisation in relation to clearly defined objectives. As it stands, however, professionalism is being sacrificed for political appointments.

And even if government persists with the culture of political appointments to key positions in parastatals, the very same government also urgently needs to establish whether the objective of parastatals is profit or the benefit of the South African public.

At a panel discussion hosted by the South African Institute of International Affairs in Cape Town last month, ANC MP Ben Turok said state-owned enterprises must ask themselves whether they are only assisting the private sector or the general public. He believes state-owned enterprises need to be driven by clear developmental goals.

This introspection Turok is calling for cannot occur without some debate from government first, though.

Furthermore, it’s not just the SABC that has been mired in chaos.

From Transnet to Denel to SAA, South Africans have been subject to a story of inefficiency, wastefulness and political patronage. And it seems to be a never-ending story too.

According to the 2013 Budget Review, SAA, the mining company Alexkor and the arms manufacturer Denel are guzzling public funds just as quickly as their problems accumulate.

In its Budget Review document, the treasury said: “Reasons for the poor performance of these three companies included policy uncertainty, costs associated with non-commercial activities, operational inefficiencies, management instability and lack of adequate co-ordination between boards and the shareholder.

“In the case of SAA, fundamental changes in the global airline industry also played a role.

“Over time, the equity of entities that persistently lose money is gradually eroded, which eventually requires that they be recapitalised. Over the next year, the government will work with SAA, SAX [South African Express], Denel, the SABC and the South African Post Office to develop sustainable, long-term strategies, which may include some form of restructuring.”

What remains to be seen is how the sustainability of parastatals can be secured. There is still little accountability from the parastalsals themselves, or the governance structures surrounding them, about the inner realities of the operations of the likes of the SABC, SAA, Eskom and Denel.

And often it appears to be forgotten that parastatals, by nature, have been financed by taxpayers. This means that the main stakeholders in state-owned enterprises are members of the public –  you and I – whose taxes have been invested in these corporations.

So, while the country is still standing, the custodians of the country are certainly not offering the rest of us much confidence in their ability to lead effectively. The dire state some of the country’s most valuable parastatals is a bitter indictment of the Zuma administration. DM

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Photo by Sapa.


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