The Economic Freedom Fighters (EFF) are committed to managing major state-owned enterprises (SOEs) with the strong belief that, if managed effectively and efficiently, they can be the very basis of national economic security. We have consistently advocated against privatization.
Finance Minister Enoch Godongwana recently suggested that South Africa has an excessive number of state-owned enterprises given its current financial situation. We strongly dispute this claim.
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Our position is that, despite the fiscal challenges posed by impending austerity measures, state-owned enterprises can and should play an important role in shaping South Africa's economic trajectory. Thing. Such measures have historically proven ineffective in achieving sustainable economic outcomes at home and abroad.
The EFF argues that South Africa's continued relinquishing of undue influence over the national treasury could be detrimental to the country's future.
The argument that South Africa has too many state-owned enterprises stems from the idea that the state should not actively participate in the market. Rather, it should simply be regulated and allow the private sector to play a more important role in the provision of social services and contribute to national economic security.
However, this ideology has been challenged by the reality that private capital in post-apartheid South Africa has consistently overlooked issues of inequality, poverty and unemployment, so long as a select few continue to enjoy substantial benefits. I close my eyes.
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Moreover, the ANC proved incapable of steering the economy towards the national interest.
South Africa has more than 300 state-owned enterprises. Unfortunately, these organizations are plagued by widespread corruption, inefficiency, and an appalling lack of coordination and oversight.
These problems have reduced state-owned enterprises to mere procurement sites, plagued by corruption, operated in an ad hoc manner rather than serving as an important sector, and sometimes creating regulatory hurdles.
In stark contrast, our Brics partner China has shown that state-owned enterprises can be central pillars of a positive and transformative national and international economic landscape.
A superficial analysis might suggest that China's recent reforms are aimed at downsizing or abolishing state-owned enterprises. However, a more nuanced understanding reveals that these reforms are part of a larger political strategy: socialism with Chinese characteristics.
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Far from trying to shrink state-owned enterprises, China is trying to improve their efficiency, performance, and coordination. China's state-owned enterprises also play an important role in areas essential to the lives of ordinary people. They are primarily responsible for providing water, electricity and communication services, benefiting Chinese citizens by reducing utility bills.
Through these efforts, China has been able to lift more than 50 million people out of poverty in just five years.
Although South Africa's unique features and characteristics need to be taken into account, there is no denying that SOEs are important to national economic security.
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Certain sectors such as energy, transportation, and manufacturing should be designated as specific industries involving state-owned enterprises. This is not to exclude the participation of private capital, but to ensure that it does not threaten national stability or hinder development.
For example, the development of new cities to alleviate overcrowding in areas such as Johannesburg and eThekwini would benefit from the coordination and leadership that state-owned enterprises can provide. These organizations can oversee the creation of new industry sectors and manage high-risk social technology initiatives. The responsibility for leading such large-scale projects lies with state-owned enterprises.
Additionally, primary health care, sanitation, and food security are key areas where state-owned enterprises can create an environment in which private sector investment can later flourish.
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The long-term benefits of investing in such state-owned enterprises cannot be underestimated.
– Mr Maotwe is the EFF's Director of Finance and a Member of Parliament who serves on the Portfolio Committee for Public Enterprises.