The government of national unity (GNU) brings with it the opportunity to revisit and rewrite so many of the ways that “things are done around here” within the government. Not least of these is a renewed, and obviously necessary, focus on state-owned enterprises (SOEs) — on structure, reporting, ownership, funding, management ... the works.
The solution will need to pivot around various axes and involve some directional choices, such as government versus the private sector, local versus central, and insourcing versus outsourcing.
Much has been spoken about selective outright privatisation, but it’s not going to be as binary a choice as that. The private sector gets many things to work, but it does so motivated primarily by profit. Pricing for a profit will be affordable for only a minority of our people (perhaps less than 10%).
Although private sector substitutes serve as useful stopgaps (in electricity, water, healthcare, education, personal security), they won’t provide sustainable solutions.
There is talk of a state holding company for major SOEs, which could have merit depending on the functions assigned to it. Capital origination, pricing and allocation, and policy formulation, may be good. Operational interference, as we’ve already experienced, would be bad.
There are certain utility and developmental functions that will necessarily have to be performed and protected by the state. Work has already begun on a new Public Procurement Act, which could be a welcome rewrite of the currently flawed, corruption-enabling processes in place, particularly in relation to the participation of middlemen.
Once these essential elements of design have been dealt with and the mandates they lead into have been agreed to and are capable of contractual implementation, it will be time to move away from the head office and onto the field, where the job has to get done.
Now it’s about capacity and ability, and often this is a choice between insourcing and outsourcing. It’s a complex debate, but I fall on the side of building capacity within the state as the way to go. Outsourcing is easier and faster, but it is certainly more expensive and it creates dependency. As much as the 10-fold increase in social grant payments is dressed up as an achievement, it really is not. Creating a dependent population in the hope that a stipend will secure you their vote is an indication of weak, short-sighted leadership.
Getting other people to do what you could learn to do yourself is already destroying the foundations our children need to build on — make your own bed. The state must employ and develop in-house expertise, if not only to enable it to function properly, then at least to qualify it to pass informed judgment on a job well done (or not) and fair value obtained.
It is harder, and it will take longer to bring about the cultural adjustment required, but it is surely worth it. The state can be transformed into a centre of excellence, but only with confident, competent leadership driving it.
To attract our best young talent will require the adoption of outcome-based remuneration structures. It is far more beneficial to have management participate in a tiny slice of a successful outcome than to suffer the huge failure that incompetent management will deliver as the alternative.
To move away from where we are now will require a blank sheet of paper and a clear understanding of well-defined purpose. Those gathered to take on this challenge will have to leave their baggage, comfort zones, bad habits and old mindsets at the door and sit down with clear minds to imagine, from scratch, a new functional ecosystem — one that works for us given our unique needs and aspirations.
Such an answer will not be found in textbooks or university degrees or case studies from anywhere else in the world. We have to make our own, incrementally: doubting and doubting again, testing and testing again, until measurable, replicable, scalable evidence shows us we’ve got it right.
• Barnes is an investment banker with more than 35 years’ experience in various capacities in the financial sector.
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