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State jobs for pals practice damaging SA's economy

By unknown | Oct 07, 2009 | COMMENTS [ 0 ]

MANY of the glaring failures of South Africa's state-owned companies are because senior executives, board members and chief executives are often appointed because of patronage, which often leads to the appointment of ineffective, incompetent and corrupt appointees indebted to their sponsors to provide contracts, tenders and other appointments.

Of course, in every democracy, there are some levels of patronage, be it class, political or ethnic, in public appointments.

But patronage in appointments to the boards and senior management of state-owned companies in South Africa now runs particularly deep.

The furore over some ANC leaders insisting on pushing Siyabonga Gama as Transnet chief executive, against the wishes of the board, who have shortlisted other black candidates ahead of him, will cost the company dearly.

The perception from observers, in spite of his (Gama's) backers claiming racism is at the heart of opposition to his appointment, appears to be that the real issue may be patronage.

Even if Gama is not appointed, able would-be chief executives and board members would think twice about presenting themselves in the future for possible appointment to Transnet. The morale of the staff at Transnet is likely to plunge.

Transnet's reputation in the marketplace has been damaged. The priority of any new chief executive will be to raise finance. However, the cost of such finance would now immediately be more expensive because of the credibility crisis into which the battle over the chief executive appointment has plunged the rail utility.

But other state-owned companies, that may be better run, will also see their ratings affected negatively because of the shenanigans at Transnet.

South Africa's economy just can't afford the costs of patronage appointments to public companies anymore. Public companies are being run into the ground, which means service delivery is collapsing; potential investment opportunities and job creation possibilities are lost.

There cannot be any doubt now that the system of appointments to the boards, or as CEOs to state-owned companies must be drastically overhauled. It is crucial that political, ethnic or the jobs-for-pals bias must be taken out of appointment process of state-owned companies.

Perhaps we should look at the appointment of an independent, non-political commission or commissioner for public appointments. The process of appointments to public office is now so tainted with patronage that the danger is that such a commission would also be appointed on the basis of political patronage.

Nevertheless, a body of this kind, that can operate transparently, with standardised rules for appointments, and which recommends appointments on merit, and which is independent from political control, should be seriously considered. It is absolutely crucial that the pool of appointments to boards and executives of state-owned companies be extended beyond one faction of the ANC to include every available top talent in the country.

Furthermore, with expectations for service delivery at fever pitch, it will be political suicide for President Jacob Zuma to allow appointments to public leadership positions to be limited to a small pool of politically connected individuals approved by one faction of the ANC.

l Gumede is author of Thabo Mbeki and the Battle for the Soul of the ANC


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