South African presidency defends new team to oversee state-owned companies - CNBC Africa

South African presidency defends new team to oversee state-owned companies

Southern Africa

by Reuters 0

Picture: Wikipedia

South Africa's presidency on Thursday defended plans to give President Jacob Zuma supervision over state-owned companies after allies of under-fire Finance Minister Pravin Gordhan said it was a tool to limit his control.

Cabinet announced on Monday that a new committee on state-owned enterprises (SOEs) would be set-up to "provide Zuma line of sight on strategic decisions and interventions" to improve the performance of SOEs.

Former finance minister, Trevor Manuel, said the new council was an attempt to limit the powers of Gordhan, who declined a request by an elite police unit this week to present himself in relation to allegations he used the tax office to spy on politicians, including Zuma.

"There has been intense speculation since the announcement this week, with some commentators and journalists suggesting some sinister motives behind the establishment of the Council," the presidency said in a statement.

"Such speculation is baseless and false."

Analysts have said that Zuma's team and the Treasury under Gordhan have disagreed about government spending, including at loss-making state companies like South African Airways.

Gordhan has pledged to rein in government expenditure to limit rising inflation, narrow a gaping budget deficit and appease ratings agencies considering cutting South Africa to "junk" status in reviews expected by December.

 

(Reporting by Joe Brock; Editing by James Macharia)

 

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