South Africa’s ruling class has an uncanny ability to learn all the wrong lessons from history. Every time we think we’ve hit rock bottom, the government appears with a fresh shovel, determined to dig deeper.
Enter the National State Enterprises Bill, a legislative proposal that seeks to consolidate South Africa’s already failing state-owned enterprises (SOEs) under a new holding company, State Asset Management SOC Ltd (SAMSOC). On paper, it promises “efficiency” and “streamlined governance.” In reality, it’s a catastrophic gamble—a sequel to the state capture horror story, only this time with a bigger budget and even fewer accountability measures.
If past is prologue, this Bill isn’t a solution; it’s a cynical power grab masquerading as reform. This is a movie that we have all seen before.
Spectacular failure of state control
South Africa’s long-running experiment with state ownership has been about as successful as a minibus taxi with no brakes. Eskom, once the continent’s crown jewel of energy production, is now a load-shedding factory. Transnet, the backbone of our economy, can’t move goods efficiently enough to keep ports running, leading to an over-reliance on road transport of goods which has proved not to be sustainable. SAA, the airline that refuses to die, has gulped down billions in bailouts—money that could have built hospitals, schools, or literally anything more useful than yet another failed national carrier.
Now, instead of acknowledging that centralised control is the problem, the government wants to double down on it—combining all these faltering SOEs into a single mega-entity. This is the bureaucratic equivalent of duct-taping three sinking ships together and calling it a fleet.
Even worse, the Bill exempts SAMSOC from the Public Finance Management Act (PFMA)—the very law meant to ensure transparency and fiscal responsibility in public enterprises. Removing these safeguards is like handing a teenager the keys to a Ferrari and disabling the brakes. The only possible outcomes are reckless spending, financial implosion, and a spectacular crash, whose impact will be most severely felt by the South African taxpayer.
Déjà Vu, but worse
The Zondo Commission exposed in painstaking detail how state capture under President Jacob Zuma was enabled by centralised government control over SOEs. Appointing pliant executives, bypassing procurement rules, and funnelling taxpayer funds into patronage networks became standard operating procedure.
Now, instead of decentralising power, the Bill supercharges it—placing multiple SOEs under direct presidential oversight, removing legal accountability, and creating a single cash cow for politically connected elites. If you thought the Guptas had it good, wait until you see what happens when the feeding trough is widened.
This isn’t just a governance failure; it’s an open invitation for corruption. The Bill essentially transforms SAMSOC into a shadow state, controlled by the executive and unaccountable to Parliament. If one SOE collapses, the contagion spreads—threatening the entire economy. Eskom’s failures have already dragged the GDP down; imagine if its bankruptcy were fused with Transnet and SAA in a domino effect of destruction.
Even more alarming is how this Bill prepares the ground for future abuse, regardless of who sits in the Union Buildings. While the current administration may insist that it has the best intentions, laws outlive governments—and history has shown that once power is centralised, it is almost never willingly relinquished. What happens when a future leader, with even less regard for constitutional checks and balances, inherits a ready-made vehicle for looting and authoritarian control? We have already seen how quickly democratic institutions can be repurposed for private political gain. This Bill doesn’t just enable state capture—it institutionalises it, ensuring that corruption is not an aberration, but a built-in feature of South Africa’s economic landscape.
A litmus test for GNU
Moreover, this Bill is more than just another piece of misguided legislation—it is a defining moment for South Africa’s Government of National Unity (GNU). The GNU was formed with the promise of collaborative governance, bringing together parties with divergent ideologies to tackle the country’s economic and institutional decline and putting the interests of our citizens first. Yet, its silence on this issue is deafening. If it cannot stand firm against a proposal that so blatantly contradicts the principles of transparency, accountability, and economic liberalisation, what does that say about its ability to enact real reform?
For the DA, IFP, and VF+, this is a credibility test. These parties have long positioned themselves as defenders of fiscal responsibility and market-driven solutions. If they allow the National State Enterprises Bill to pass without challenge, it will expose them as mere accessories to ANC policy—complicit in economic mismanagement rather than a check against it. This would shatter the illusion that the GNU is a genuine coalition of reform and confirm that it is, in reality, just an ANC-led arrangement with a few extra logos tacked onto it.
And let’s be clear: voters have long memories when it comes to political betrayals. In Germany, the so-called traffic light coalition collapsed because its member parties compromised on core principles, alienating their supporters in the process. The same fate could await the GNU if its constituent parties abandon their economic convictions in the name of political expediency. South Africans will not forget who stood by while the state doubled down on centralisation—and when the next election rolls around, they will punish those who failed to act.
The real solution: less state, not more
If South Africa is serious about fixing SOEs, the answer isn’t more state control—it’s less. Other developing countries have privatised inefficient state entities with remarkable success.
We need market-driven reforms—selling stakes in SOEs, allowing private competition, and enforcing independent oversight rather than centralised cronyism. Instead of funneling billions more into failing state monopolies, we should be attracting investment. If SpaceX can send rockets to Mars, South Africa should at least be able to keep the lights on—but not with an Eskom-style model.
Make sure that as a citizen of this country you make your voice heard on this disastrous bill by submitting your comment before tomorrow’s deadline.
[Image: Gerd Altmann from Pixabay]
The views of the writer are not necessarily the views of the Daily Friend or the IRR.
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