Speech by Deputy Finance Minister Nhlanhla Nene, MP On the ...

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Let me take this opportunity to reflect on the changed context of developmenthere in South Africa and the wider region over the last two years. As aneconomy, we still face classical challenges of a developing economy: too fewresources chasing too many social and economic challenges. The need forfocus and prioritisation cannot be over-emphasised.While economic impairment arising from the financial crisis has not been of apermanent nature, the recovery from this requires conscious orchestration, anda focused approach, to avoid further regression, and to thereby ensure SouthAfrica takes the opportunity to be buoyed by global recovery.Despite the fact that the worst of the financial crisis and downturn is behind us, itremains a fact that the demand for resources is at its peak. Accordingly, theimperative for effectiveness has never been greater. Our considered view inGovernment is that, as the role of the state is strengthened to championdevelopment more vigorously, state-owned enterprises, including developmentbanks, will have a more critical role to play.The matter of the role and effectiveness of state owned enterprises (SOEs) anddevelopment finance institutions (DFIs) has been in the public discourse forsome time now. Objectively, the government seeks to eliminate poorgovernance and the wastage of resources where this is evident. It also seeks toensure the alignment of these key public institutions to the social and economicobjectives of Government.2
Much has been observed and said on the performance of SOEs and DFIs, but itmay not be apparent to the general public yet that there is significantly greaterconsensus and emerging clarity on the mandates and foci of public enterprise ingeneral, as a result of intense engagements by supervising Ministries.Similarly, it has been observed that the state’s machinery is notorious for itsuncoordinated approach to delivery of its mandated objectives. In anenvironment where resources are scarce, co-ordination and prioritisation ofobjectives is of primary importance. The introduction of performanceagreements for all state departments and DFIs, while engenderingaccountability, will assist in ensuring common objectives, planning and acoordinated approach to delivery. This will equally ensure that resources suchas SOEs and DFIs are optimally deployed towards key government objectives.South Africa needs stronger and smarter partnerships to increase investmentsin infrastructure development and public goods, to stimulate local economicdevelopment, and to generate as many jobs as possible, especially jobs thatcan absorb the large and growing numbers of unemployed youth. Suchpartnerships should enable greater developmental outreach faster, and alsohelp create better conditions for further investment and innovation.3
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Speech by Deputy Finance Minister Nhlanhla Nene, MP On the ...

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