The Department of Planning, Monitoring and Evaluation, located within the Presidency, has requested $34 million in seed funding to establish the State Asset Management Company, or Samsoc.
The proposed entity would bring major SOEs such as Eskom, Transnet and SA Airways under a single umbrella, reporting directly to the President. Officials say the centralised structure will improve oversight, reduce political interference and eventually restore profitability to institutions long seen as a drag on the national fiscus.
But the plan has met resistance. Critics question whether consolidating SOEs in this way will address the root causes of their dysfunction or simply entrench them further.
The initiative, originally conceived under the late Minister Pravin Gordhan, is being formalised through the National State Enterprises Bill. Yet the bill has already hit its first stumbling block, having been rejected by the National Economic Development and Labour Council. At the heart of the pushback are concerns over transparency and whether Samsoc will be subject to the Public Finance Management Act (PFMA), which imposes strict rules on financial accountability.
SA’s largest labour federation, Cosatu, has come out against the proposal. Spokesperson Matthew Parks warned that placing a wide range of state companies with different mandates under one authority could create more problems than it solves.
“We’re worried about the suggestion that Samsoc could be exempt from the PFMA,” Parks said. “That legislation exists to prevent the kind of corruption and mismanagement we’ve seen in the past. It’s also essential for promoting local procurement and protecting jobs. Any attempt to weaken those safeguards would be deeply problematic.”
During a recent briefing to Parliament, Chief Policy Analyst Pulane Kole maintained that Samsoc could become financially self-sustaining within three years, once it begins receiving dividends from the SOEs under its control.
“We’ve run several restructuring models, and we believe this approach aligns the SOEs with national development goals,” Kole said. “The expectation is that Samsoc will eventually operate without reliance on the national budget.”
Still, lawmakers remain unconvinced. Rise Mzansi member of parliament (MP) Makashule Gana pressed officials for clarity on how the $34 million figure was calculated, and whether taxpayers would ultimately be saddled with the cost of another failing experiment.
“Many of these entities haven’t turned a profit in years,” Gana said. “Why should we believe that this time will be any different?”
Democratic Alliance MP Katherine Christie echoed those concerns, questioning whether placing so much power in the Presidency’s hands might create new avenues for corruption.
“A centralised holding company could make oversight more difficult, not less,” she warned. “We’ve seen what happens when governance is weakened. This bill could end up protecting the very behaviours it claims to prevent.”
Kole, however, insisted that if the bill becomes law, it would mark a turning point in the governance of SOEs.
“We’re aiming for entities that are depoliticised, competitive and better aligned with the country’s economic priorities,” she said.
The Economic Freedom Fighters were also sharply critical, with MP Chumani Matiwane accusing the Presidency of using governance reform as a smokescreen for future privatisation.
“This bill gives the Presidency unchecked power over appointments and dismissals,” Matiwane argued. “That doesn’t solve the problem of accountability, it compounds it.”
Even government officials acknowledge that Samsoc alone will not fix everything.
--ChannelAfrica--
