About this time a decade ago, a letter purportedly written by a sitting president of the ANC and his deputy made its way to the media. In the letter, supposedly authored by Thabo Mbeki and Jacob Zuma, the pair urged party members not to undermine service delivery in their names ahead of the ANC’s elective conference in Polokwane in 2007.
Whatever its intentions, it is now common cause that the letter failed to either unite the ANC or protect the country’s citizenry from the governing party’s factional battles. A decade later, we find ourselves in a worse position.
The economy is a victim of the corrosive effects of the events in the long run-up to the December conference, which, as things now stand may or may not happen.
Nowhere is this malaise more evident than in the governance of the largest of the 700-odd state-owned enterprises (SOEs). A fortnight ago, Cyril Ramaphosa, Zuma’s deputy, made an impassioned plea to a teacher union to defend the Public Investment Corporation (PIC) from plunder after reports that there were moves to remove CEO Daniel Matjila.
Ramaphosa’s call came a few days after a statement clearing Matjila of wrongdoing. Curiously, this was followed by a call from Finance Minister Malusi Gigaba for a forensic inquiry into the PIC and the disclosure of the transactions it has funded. According to the minister’s letter, the rationale for this step was to ensure that the PIC, "one of the best-performing public entities with a good track record", was "depoliticised". The letter asked for a list of "prominent influential persons" who had benefited from the PIC. Also, the terms of reference of the probe should be submitted to him by next Monday.
Labour unions including the Federation of Unions of SA, are now threatening to withdraw their members’ pensions from the PIC. The PIC’s investments, through bonds and listed stocks, are a matter of public record.
A year ago, opposition members asked for transparency around investment in unlisted entities, which have no stringent disclosure requirements. Therefore, it’s unclear how this information is to be used in restoring the "integrity of the PIC" and "ensuring the public’s confidence" in it.
We are going to have to either wait it out or have an interim arrangement to protect the governance of the SOEs between now and 2019
In theory, at least, a call for transparency shouldn’t be a bad thing. The timing of this letter, however, was suspect. Back in 2007, Mbeki was concerned about the paralysing effect on governance occasioned by the ANC elective conference. At least then one faction — Mbeki’s — was in charge of governance, especially the SOEs. This is not the case today. Various ANC factions control portions of the state.
The situation is worse at major corporations. For example, South African Airways continues to limp along with a chairman whose continued status as a director is being questioned by regulators. Eskom is operating without a CEO and its former CEO is contesting his dismissal in court. Until the matter is resolved, the board, or its shareholder representative, cannot make a permanent appointment.
Also, judging by Public Enterprises Minister Lynne Brown’s track record, only the naïve believe a new Eskom board will be in place before December. Worse, without permanent leadership, no investor would dare invest a cent or roll over loans to any of these SOEs. The Airports Company SA is on autopilot with an ineffectual CEO and a disputed board. The Passenger Rail Agency of SA has no board or full-time CEO.
And, after a promising start under the interim board, the bankrupt SABC has been operating without a board for a month. Zuma is still "applying his mind" on the names submitted to him by Parliament. This is ominously reminiscent of the situation in 2007. The SABC is especially vulnerable to the damaging effects of messy intra-ANC wrangling. A board, even an interim one, would ensure that principled journalism is protected in the period leading up to December.
For years now, the current administration has been talking about major reforms of SOEs. These reforms, punted in lofty reports, have been gathering dust and are unlikely to be implemented before the 2019 elections. Sad as it is, we have to confront the reality of what’s unfolding. No one with the requisite skill set is likely to accept a position, executive or nonexecutive, from a regime that may or may not be in charge in a month or two.
We are going to have to either wait it out or have an interim arrangement to protect the governance of the SOEs between now and 2019, as was the case through the transitional executive arrangements prior to the 1994 elections.
• Dludlu, a former Sowetan editor, is founder of Orwell Advisory Services.
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