State-owned Companies capable of driving economy in future
MINISTER of Public Enterprises, Malusi Gigaba, says state-owned companies (SOCs) must play a positive role in providing infrastructure and related services in the continent, in order to secure the country’s economic future. Gigaba was speaking at the Progressive Business Women’s Summit that was held in Johannesburg on, the 20 of August 2012. Gigaba says regional economic integration is an immediate strategic necessity, a core element of not just securing the country’s growth for the future but managing the economic turbulence of the present.
According to the Minister, SOCs also have a key role to play in driving programmes that would put in place the infrastructure, skills as well as the industrial and technological capacity to drive the economy in future. Gigaba strongly believes that it is necessary to look for ways to increase the scale of the investment programmes should the global economy decelerate further.
He says it is important that ways of strengthening the SOC balance sheets are found. A strong balance sheet will decrease the price of debt for SOCs and create a resource buffer to sustain the investment programme and, more fundamentally, a strong balance sheet will create a high level of business confidence that the investment programmes will be rolled-out regardless of a broader economic slowdown. Gigaba says his department has established a new division focused on developing innovative funding models to help expand the investment programmes.