South Africa: What’s the New National State Enterprises Bill About?

The National State Enterprises Bill is being called the biggest reorganisation of state-owned companies in more than 20 years. The draft legislation has been published for public comment, but may not make it into law any time soon. We break down the details.

What does the Bill propose?

The headline detail is that the draft legislation would spell the closure of the Department of Public Enterprises, a ministry that few are likely to miss, given its patent failure to control the death spiral of most of South Africa’s state-owned enterprises (SOEs).

In its place would be a holding company to supervise the SOEs: the State Asset Management SOC Ltd.

What is the point of replacing the state’s Department of Public Enterprises with a new state-owned enterprise to manage the other state-owned enterprises?

That is indeed the question of the moment. But there is some optimistic thinking behind it, which the proposal’s major champion — Public Enterprises Minister Pravin Gordhan — explained to Parliament in May 2022.

Gordhan said at the time that the shake-up, which he is understood to have been working on for the past five years alongside the Presidential State-Owned Enterprises Council, would improve financial performance and reduce political meddling.

The minister told Parliament that the establishment of a holding company would “separate the state’s ownership functions from its policy and regulatory functions, minimise the scope for political interference, introduce greater professionalism, and manage state assets in a way…

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