The destruction of state-owned enterprises under the Zuma administration began with the appointment of crony and weak and inappropriate directors.
Now there are fewer cronies around but the tendency of cabinet ministers to appoint friendly directors who will toe the line has not changed. Nor has the tendency to deploy comrades and political allies who are not appropriately skilled but need an income or a reward for favours.
Worst was the appointment in August by water, sanitation & human settlements minister Lindiwe Sisulu of former ANC youth leader Magasela Mzobe to chair Umgeni Water. In the Zuma era appointments to water boards, which are low-key, were an important step in building Jacob Zuma’s patronage network.
Last month Sisulu said she had discovered that the board of Umgeni Water had not been properly appointed by her predecessor. She removed the directors en masse and put an interim board in place with Mzobe at the head.
Mzobe is a party political activist who has experience in working in a government department. However, he is not known to have any corporate experience or expertise in water infrastructure and provision.
Also disturbing were the five new appointments to the board of the SA Post Office (Sapo) this month by communications minister Stella Ndabeni-Abrahams. She is in the midst of a dispute with the board of Sapo and recently demoted the chairperson. The new directors stand out for their lack of remarkableness.
During the Zuma era this was always telling: directors who appeared from nowhere with limited experience, owed their good fortune to the politician who appointed them, and were not there first and foremost to fulfill a fiduciary duty.
The five are mostly unknown, though one — Mavivi Mayakayaka-Manzini — is an ANC career politician and former diplomat and another — Sipho Majombozi — could be the same person who had a scrape with public protector Thuli Madonsela back in 2010. Madonsela made a finding of maladministration against a Sipho Majombozi for his role as chairperson of the Eastern Cape Gambling and Betting Board. As Sapo has still not provided any biographical information of the new directors even weeks after the appointments, it is difficult to confirm this with certainty.
Strongly independent directors can be troublesome, as mineral resources & energy minister Gwede Mantashe found on taking over the energy portfolio, which includes the Nuclear Energy Corporation of SA. Directors, including chairperson Pulane Kingston, who were given the responsibility to turn the corporation around by previous minister Jeff Radebe, quit after their positions became untenable. They were unable to enlist the attention and support of Mantashe in carrying out their duties and were aggressively reprimanded when they tried to do so. Mantashe made no secret that he was happy to see them go and promptly appointed a much friendlier board of his own.
And then there is Eskom. The Eskom board is down to seven nonexecutive members and has had an acting chairperson — Malegupuru Makgoba — whose career experience is mostly university administration, for the past nine months.
The board was appointed in January 2018 as a crisis response to Eskom’s financial instability. It was pulled together on the basis of “Thuma Mina” — a call from President Cyril Ramaphosa to perform national service and help rebuild the troubled institution. It was not long before the board recognised its own weaknesses, having only two members with engineering qualifications and energy experience. One of them — Sifiso Dabengwa — has since resigned, leaving Neli Magubane as the only engineer on the board.
Since early in 2019 public enterprises minister Pravin Gordhan has spoken of his intention “to augment” the board. In recent interactions with the board Gordhan made no commitments, despite a plea from directors that they are stretched too thin. On Monday Gordhan said in response to questions that the Eskom board “was under review” and government processes would be completed in the next few weeks.
In the end it again comes down to the same old state-owned enterprise governance question: are these companies or are they government departments? It is a question Ramaphosa’s Presidential State-owned Enterprise Co-ordinating Council should answer.
• Paton is editor at large.
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