State Capture Commission Recommendations for Improving SOEs Gather Dust As Eskom, Transnet Continue To Bleed Public Funds

Chief Justice Raymond Zondo's 2022 State Capture Commission offered a set of governance improvement recommendations for South African State-Owned Enterprises (SOEs), aimed at preventing further State Capture at entities like Eskom and Transnet. It's October 2023, and no significant changes have been reported.

Despite the Commission stressing the need for SOE appointment processes to be based on merit, independent of political manipulation, the draft National State Enterprises Bill proposes that the President, as the sole shareholder, should be the one to appoint/dismiss board members.

The Zondo Commission recommended the establishment of an appointment oversight committee- led by a retired judge, including representatives from fields like auditing and the National Economic Development and Labour Council (Nedlac). Contrary to this, the National State Enterprises Bill empowers the President to make appointments- in direct disagreement with the Commission's aim for independent, transparent, and monitorable procedures.

Two partially favorable developments include new public procurement legislation and draft legislation amending the Companies Act. These aim to counter private sector State Capture abuses, among other objectives.

However, no measures to combat State Capture and corruption—such as the Zondo Commission's suggested anti-State Capture and Corruption Commission—have been taken yet. Existing failures like the inability of Parliament to hold the executive regulated again underline the need for such a body.

Public Enterprises Committe's overlooking Eskom, Denel and Alexkor for failing to submit their financials on time, and Governance issues highlighted by high-profile resignations at Transnet and Eskom, indicate a broader governance failure.

As Transnet's massive R130-billion debt and Eskom's R254-billion bailout depict, the failure to follow the Zondo Commission's recommendations can have severe financial repercussions. Meaningful improvements in SOE governance and procurement reforms are urgently needed if South Africa hopes to save its struggling SOEs.