Mother of all SOE’s
The National State Enterprises Bill [B1-2024] has resurfaced in Parliament amidst widespread concern that it may be less about operational reform and more about centralising presidential control over state-owned enterprises (SOEs). Now revived in identical form post-election, the Bill proposes a powerful new entity, the State Asset Management SOC (SAMSOC), ostensibly to rationalise SOE oversight. But what lurks beneath may undermine the foundations of parliamentary democracy.
Unpacking the Bill’s Intent
Originally drafted by the late Minister Pravin Gordhan and re-tabled by Minister Maropene Ramokgopa who now proposes the Bill and recently accompanied President Ramaphosa on a high-level delegation to China, the Bill aims to ‘consolidate ownership functions’ under SAMSOC, positioning it as the executive holding company for 13 major SOEs. Treasury and Reserve Bank would act as financial secretariats, reporting to the Presidency.
Yet the Bill removes the Public Finance Management Act (PFMA) from applying to SAMSOC, with only cursory exceptions. Legal opinion from National Treasury (NT) underscores this as a constitutional breach, citing Section 216, which mandates fiscal oversight by NT over all government-related spending.
Treasury’s Alarm Bells
At a recent Parliamentary Committee session, NT reiterated its opposition. Acting Deputy Director-General, Advocate Empie Van Schoor, explained that the PFMA cannot be ignored when public funds are involved — and SAMSOC will undoubtedly need state guarantees. NT highlighted contradictions between the PFMA and the Companies Act and questioned the Bill’s assumption that these conflicts could simply be ‘sorted out later’. Members of all major parties expressed concern. Tony Trollip (Action SA) criticised the R615 million cost of setting up SAMSOC as ‘bureaucratic bloat’ and doubted government’s capacity for ‘innovative fundraising’. Mzwanele Manyi (MKP) went further, accusing the Bill of ‘licensing state capture’ and labelling it ‘manipulative’ and unconstitutional. Dean Bergman (DA) stressed the PFMA must trump commercial codes wherever public funds are used.
Plenty concerns
NEASA CEO Gerhard Pappenfus has raised red flags over the removal of key accountability provisions from earlier drafts. He criticised the Bill’s failure to attract private investment, warning it entrenches state dependency while masking executive centralisation. Futuregrowth Asset Management noted that the Bill adds yet another layer of legal complexity without addressing core governance failures. Their submission to Parliament durng the original hearings in 2023 questioned why a new law is needed at all when existing SOE legislation could be reformed.
What’s Really at Stake?
This Bill may appear as reform but reads more like consolidation of executive authority. It positions the President closer to operational and financial decision-making, bypassing both Parliament and Treasury. The broader political concern is that it could sideline the Government of National Unity (GNU) by building a parallel command structure for state enterprises. Minister Ramokgopa’s department, a branch increasingly seen as an ideological nerve centre for executive authority under President Ramaphosa, plays a pivotal role.
This yearning for centralised control, some would say inspired by command-style governance, is masked under the guise of reform. The deeper concern may lie not just in the legislation, but in the motives of its drafters and the broader ideological direction in which the Presidency appears to be steering state power. Paul Maritz opines in Business Day as follows: https://www.businessday.co.za/bd/opinion/2025-02-12-paul-maritz-national-state-enterprises-bill-is-the-path-to-state-capture-20/#google_vignette
Conclusion
As Parliament invites final public comment, stakeholders must ask: What problem is this Bill really solving? And at what democratic cost? With public debt mounting and SOEs floundering, meaningful reform is vital. But any attempt to bypass Parliament or marginalise Treasury must be treated with the greatest caution.
Patrick McLaughlin
editor