News
Some 80 state enterprises to be restructured under sweeping reforms
Restricting Treasury guarantees for loss-making state-owned enterprises, controls on their finances, and the policy on restructuring the institutions will be included in a bill to be submitted to Parliament shortly.
The proposed bill is being finalised by the Attorney General in terms of the state-owned enterprise reform policy of the government. One of the key features of the proposed bill is that the stress caused by SOEs on state banks by extending support through Treasury guarantees will be reduced. The bill will also have provisions to increase the transparency of SOEs.
It calls for regular publication of financial statements and contains provisions regarding employees, including overstaffing issues. The Sunday Times learns that some 80 SOEs are to be subjected to a restructuring process, while some of the enterprises will be granted a grace period to be revived, and a final decision about the restructuring process will be taken thereafter.
According to the government’s SOE reform policy, all commercial SOEs will be subjected to divestment, except in matters of national security and when there is no potential for private participation, among other matters.
Another policy would be that the state will hold shares in commercial entities only through a holding company, whose remit will be to ensure the professionalism, productivity, and competitiveness of such entities.
All commercial SOEs will be gazetted under the Ministry of Finance, and the Ministry will delegate the management of the entities to holding companies, ending the current system where the Ministry of Finance retains 100 percent of an SOE’s share, with the line ministry retaining strategic, administrative, and operational control of the entity.
Commercial SOEs will be registered under the Companies Act, and they will compete on a level playing field with market competitors in terms of the proposed policy.
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