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Date : 25/02/2004
Source: Department of Public Enterprises
Title: J Radebe: Report on SOEs advancements in Africa


AFRICA FIRST! SOUTH AFRICAN SOES IN AFRICA: REMARKS BY JEFF RADEBE, MP, MINISTER OF PUBLIC ENTERPRISES, Marco's Place, Cape Town, 25 February 2004

Some years ago, here in Cape Town, Mwalimu Julius Nyerere compared Africa's reaction to apartheid South Africa and the continent's expectations of a democratic country. He surveyed a period of pain and suffering in Southern Africa, when South Africa was a destabiliser in the region, a menace to its neighbours. A time when South Africa was led by a regime that deliberately targeted and destroyed strategic roads, and railways, and water reservoirs, and electricity pylons, and caused general havoc on the ground and in the air. All of this on top of the wanton murder of South African freedom fighters and refugees, and citizens of African countries. In his words, "Here was a powerful South Africa, and this power was a curse to us. It was not a blessing for us."

And then he changed gear to note, "but that has changed. South Africa is democratic". Julius Nyerere expressed a common and universal wish, that South Africa should not "be isolated from the rest of Africa" and suggested instead that "what we build here because of our infrastructure ... we are building for all of Africa."

This gathering is an opportunity to report on some of the small steps we have taken so far, as a democratic African government, to overcome legacies of the past and to contribute to the regeneration of Africa for the benefit of its people. It is all more pleasant to present this brief report as we celebrate the eve of the 10th anniversary of our young democracy!

First of all, if you look at the front cover, you will notice a cunning reference to this being the first volume of 2004, presuming that there will be more editions to follow. Furthermore, the report covers only those State-owned Enterprises (SOEs) that currently fall under the DPE. So this document is very much an interim report that must be followed up.

At the same time, the report does not displace other important interventions by amongst others the SAIIA, BusinessMap, the DBSA, and obviously the reports of NEPAD and regional agencies. It attempts merely to summarise the diverse yet potentially integrated programmes and projects of our electricity, transport, information technology and defence technology and engineering enterprises. Hence concentration on Eskom Enterprises and Transnet and their respective divisions, and Arivia.kom, and lastly Mechem, Denel division responsible for a whole range of activities associated with demining, land and area clearance, and related community safety instruction.

We do not detract either from the contribution of other South African companies and institutions in the mining, resources, franchising, telecommunications, banking and retail sectors. All together, the DBSA estimates that South Africa contributes between 10 and 20% of FDI in Africa, concentrated mainly in Southern Africa, followed by East Africa, then in anglophone West Africa, and with a lesser presence in North Africa.

A cursory survey of prominent South African investments in Africa since 1998 shows that SOEs covered by this report account for some of the larger projects, led by Eskom Enterprises investment in the massive $6 billion hydroelectric scheme centred on Inga on the Congo River. The hydroelectric concessions in Uganda and Zambia are likewise massive, and are followed by the increasing investment by Spoornet and its joint venture and international business partners. It is still early days, and a lot of work still needs to be done at an institutional and country level to ensure that more of the proposals that are on the table become projects in the field, but we are confident that the process is picking up steam.

Briefly, Eskom Enterprises engineers are tapping the immense power resources of rivers in Zambia, the Nile and the mighty Congo. Others are busy surveying, building substations, erecting pylons and stretching transmission lines across a dozen countries across the continent. Still others are exploring the options of fibre optics and telecommunications systems to complement the process. From Senegal to Uganda, from Libya to Lesotho, Eskom Enterprises are cooperating with Nepad, regional and country administrations to bring the expertise of Africa's largest power utility to Africa as a whole.

Hundreds of people have begun work alongside country-based partners in the ports of Tema in Ghana, Libreville in Gabon, Beira and Maputo in Mocambique, Lobito and Luanda in Angola, Kribi in Cameroon, as well as the inland ports and container terminals in Zambia, Uganda and others. Rehabilitation, design, intermodal transport integration and project management is the order of the day. At the same time, rail technicians and surveyors are working side-by-side with their African counterparts from Burkina Faso and Ghana, to Ethiopia and Tanzania and Madagascar, to name but a few. Locomotives and wagons, specially re-engineered and refurbished through South African expertise move goods and people through Cameroon and the Sudan, for example.

Mechem deminers and their locally trained teams deploy sophisticated, but rugged machines and instruments to uproot unexploded bombs, grenades, booby-traps and landmines in some of the harshest conditions on the continent. Their work is crucial, for without demining clearance certification, development projects in the worst-mined countries of Africa, like Angola, Mozambique, Sudan, parts of the DRC and beyond, simply cannot take place. In this small way, Mechem's work supports the exemplary performance of South African peacekeepers of the SANDF, and assists the reconstruction of countries.

Significantly, nearly all our SOEs are engaged in a wide range of infrastructure and service related projects in Mozambique and Angola, two countries ravaged by years of civil war and decades of apartheid destabilization.

Our state-owned enterprises are under strict instruction from all shareholder Ministers to conduct their business in Africa with the utmost probity, irreproachable ethics, and with a conscious and deliberate policy to promote employment, particularly of women and the disabled, development of SMMEs, procurement of goods and services, and upliftment of local communities with all due reference to local law and custom. However, the lodestar for South African companies must be our Bill of Rights and the obligations it outlines. For if we do not insist on irreproachable conduct, negative perceptions about us, as South Africans will develop.

Perhaps a form of regular reporting, subject to Parliament's oversight and scrutiny, would go a long way towards the identification of any policy or regulatory interventions such as may be required to ensure that South African SOEs, let alone the private sector, conduct themselves ethically, legally and with the utmost probity.

From our perspective in Government, it is important to note how SOEs participation contributes to the larger agenda of African renewal and rebirth. They must integrate commercial viability and returns on investment with appropriate policies of procurement, the empowerment of SMMEs, the employment of local labour and services, and function generally to build up and encourage sustainable development towards the upliftment of communities and national/regional economies.

Nonetheless, I think we can all be proud of the work that is being done. At the same time we fully recognize that much needs to be done. However, the course has been set; plans provided; and now there is much work to be done! The work outlined in this booklet underlines the decision we have taken as the ANC-led Government, despite the protestations of isolationists, to work in Africa, together in Africa, for Africa's proud renewal and rebirth.

I thank you!

Enquiries: Ms Miranda Strydom
Tel: (021) 461 6376
Cell: 082 908 8976
Issued by: Department of Public Enterprises
25 February 2004

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