16 November 2009
editorial
Johannesburg — HE SURE took his time about it, but finally on Friday President Jacob Zuma made up his mind about the governance of state-owned enterprises -- and made it clear they were not to be toyed with. But it was not before he'd allowed plenty of damage to be done, not only to Eskom and other state-owned enterprises, but also to Public Enterprises Minister Barbara Hogan. Zuma's challenge now, if he wants SA's state-owned enterprises to start performing as they should, will be to ensure the damage is speedily undone.
Zuma is typically late, but at least he has made a start to putting a lid on the destructive and manipulative racial politics that have lately bedevilled efforts to resolve serious managerial issues at Eskom and at Transnet. In his ANC letter from the president on Friday, Zuma referred to fears that affirmative action gains at state- owned enterprises were being reversed, and that opposition to transformation had driven out black managers -- but suggested, albeit delicately, that those who thought this didn't really understand the issues at stake. "It would not be wise to oversimplify the challenges facing state-owned enterprises and other sections of the state machinery," he wrote.
Important too was his implicit reminder that "transformation" of the machinery of government wasn't just a race thing: it was about making the government -- including the parastatals -- perform better. Most important was that Zuma expressed his full confidence in the boards of the parastatals and in Hogan. That's crucial, coming as it does after what appears to have been an attempt by Zuma to sort out the power struggle at Eskom by getting everyone to talk nicely to each other -- an attempt that backfired horribly when Eskom chairman Bobby Godsell tendered his resignation and his board, and Cosatu and the National Union of Mineworkers, came out in his support.
Hogan has insisted Zuma didn't interfere, but merely tried to "facilitate" in the battle over whether former Eskom CEO Jacob Maroga had or hadn't resigned. But the president's actions must certainly have felt like interference, given that it's now become clear that the board never had any doubt that Maroga had indeed resigned -- and that legal opinion confirmed that from the start. And Zuma's intervention served also to undermine the credibility and the efforts behind the scenes of Hogan and her deputy, Enoch Godongwana.
For whatever reason, Zuma seems now to have figured out that Eskom is not a two-bit company, and that making nice is not the way to address the very serious challenges it faces. There are big strategic decisions that must be made if Eskom is to turn around its operations and ensure its existing network can work at maximal efficiency. There are even bigger decisions to be made to ensure it can find the cash to build the new power stations it is committed to without crippling the economy.
SA cannot afford to have a dysfunctional Eskom; last year's power crisis was just a taste of how bad it could be if Eskom were to lose the plot. It is arguably more crucial to the fate of SA's economy than any of the other parastatals. So the government needs to be very careful about its governance.
But Zuma and his ministers should focus more carefully too on all the other "headless parastatals", as City Press called them this weekend. It can be no coincidence that so many of them have acting CEs and even acting chairs.
There clearly is a governance problem here; though the board recommends candidates for the CE's post, it is the responsible minister who has the power to make the appointment.
Though Armscor, Transnet, SAA, the SABC, SA Tourism and Eskom all lack permanent CEs, each is different. But at nearly all of them there's been some sort of noxious saga involving racial politics or dodgy dealing or both. And the government hasn't acted decisively to prevent that.
So it's not a simple governance problem. The trouble at the parastatals about leadership seems to reflect a more fundamental confusion within the government about what it wants parastatals to do and who, therefore, should run them. That confusion needs to be cleared up fast to prevent further damage to these entities. And that means the government needs to obsess more about "transforming" the parastatals to ensure they play an effective role in supporting economic growth and job creation and less about the race or political connectedness of their executives.
Trouble at parastatals about leadership seems to reflect a more fundamental confusion within the government.
Be the first to Write a Comment!
Copyright © 2009 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
