by Paul Maritz, Director at Free SA
SA’s relationship with its state-owned enterprises (SOEs) reads like a screenplay from Francis Ford Coppola’s The Godfather — mismanagement, corruption, financial waste and exorbitantly expensive tailor-made suits. Yet despite all of these failures government has decided to stay the course — marching straight towards even more centralisation of power and even more bureaucracy (and quite likely, more tailor-made suits) with the proposed National State Enterprises Bill.
This bill, which even creates another state entity, the State Asset Management Company (Samsoc), will consolidate core SOEs such as Eskom, Transnet and SAA under one umbrella — all under the watchful eye of none other than the president himself.
Jokes aside, this glaringly misguided plan raises an even more obvious question: If state control and centralisation have so consistently and catastrophically failed (think Eskom, SAA, Transnet, Eskom, SABC the Post Office … oh, and Eskom), what makes this time any different? Has our national self esteem been so battered that we keep falling for the same old promise that this time will be different?
A merry-go-round of failures
Speaking of Eskom — is there any organisation in the world that better illustrates what happens when political interference and subsequent incompetence take over? Once one of the world’s most reliable power suppliers, decades of poor management and corruption literally plunged the company, and consumers, into darkness.
Then there’s Transnet, which should be the backbone of our economy but is now best known for its logistical crises, inaccessible headquarters and billions of rand in unexplained losses.
And now the government responsible for those debacles wants to appoint itself as the head prefect of an even bigger playground — and expects us to believe that this time it will work.
The bill attempts to solve the problems of centralised state-owned companies by creating an even more centralised state-owned company. Proponents argue that this will improve oversight and control, but in reality it only worsens the problem: if one SOE collapses, it could now take the entire economy down with it.
One of the most alarming aspects of this bill is that it exempts Samsoc from the Public Finance Management Act, which exists to ensure that public funds — which taxpayers contribute in good faith, expecting responsible management — are handled with discipline and transparency. Without this legal oversight Samsoc would have virtually unlimited power to manage billions of rand in state assets without proper scrutiny or accountability.
This is deeply concerning. Not only does government want to put all its eggs in one basket, it wants to silence the chickens that laid those eggs and prevent them from having a say in how their hard-earned contributions are spent. Rather than sounding like a forward-thinking economic plan, this feels more like a wolf lurking in the night.
Beyond this clear departure from democratic principles, the bill further proposes that the president have direct control over Samsoc, allowing him to personally appoint board members and executives. That means political appointments are inevitable. It is not just a slippery slope towards future state capture — it is a high-speed highway with no off-ramps.
The ANC government, now part of a coalition it calls the government of national unity (GNU), appears to be ignoring the lessons of the past 30 years. The state simply isn’t good at running businesses. Instead of managing SOEs effectively, it has turned them into debt-ridden money pits that require endless taxpayer bailouts.
The solution is not more centralisation but more privatisation and less government interference. Why is the US winning the race to Mars? The answer is simple: dedicated engineers will always be better at building rockets than ideological politicians, because while politicians can ignore Newton’s laws, economies — like rockets — cannot be fuelled by ideology alone.
The alternative is clear: SA must move away from state control as the private sector has repeatedly proven it is better at running enterprises than government. Even partial privatisation of Eskom and Transnet would encourage more competition, which boosts efficiency and innovation.
Additionally, independent oversight must be restored and strengthened to ensure that SOEs remain accountable to parliament and the private sector — instead of being consolidated into a single, all-encompassing super-company.
Ignorance or deliberate deception?
If this bill is so clearly dangerous, and if its flaws are so glaringly obvious, why is it still on the table? Does government genuinely believe more centralisation will lead to better governance? If so, it is either shockingly naive or wilfully blind to history. A more cynical — yet, unfortunately, more likely — explanation is that this bill was not drafted by accident or out of ignorance, but rather to enable a new wave of corruption and state capture.
If a bartender rings the last call and you know this might be your final free round, why not go big? By removing oversight, allowing more political appointments and granting unlimited financial power, Samsoc has the potential to be an even bigger, more deliberate and more effective tool for state capture than the previous round — which nearly obliterated what little remained of our economic silver lining.
The real test for the GNU
The National State Enterprises Bill is not just another policy issue — it is a litmus test for the GNU. So far there has been a convenient excuse for failing to block disastrous legislation such as the Basic Education Laws Amendment (Bela) Act, the National Health Insurance (NHI) Act and the Expropriation Act — which were already in parliament before the GNU was formed. But this bill is new — and it is here that the GNU’s credibility as a government of principle will be tested.
Parties such as the DA, FF+, IFP and PA have all openly declared their support for free-market policies and privatisation. They have consistently argued that SA’s economy needs less state interference and more competition. Now, they have the power to uphold this position in cabinet and parliament, yet comments from them are few and far between.
In November the DA did declare its opposition to the bill and its dedication to fighting it in parliament, but it seems as if the party has bigger fish to fry at the moment. This bill will have a significant effect on the state of the GNU, so despite various other issues on the table it cannot be allowed to slip through. If it passes without significant opposition from the GNU’s pro-market parties it will be a clear indication that they are either comfortable feeding at the trough of power, or lack the influence they claim to have.
It is easy to shout against ANC policies from the opposition benches. It is an entirely different challenge to fight those policies within the cabinet. The National SOE Bill is not just an administrative move, it is a fundamental restructuring of the economy that will shape political loyalties, power dynamics and SA’s economic future for decades to come.
The time for silence is over. The public still has one last chance to fight back. The deadline for public comments on this bill is February 14.
