Privatise the whole damn thing, if need be

Mugabe Ratshikuni questions the vociferous arguments against privatising Eskom, and other dysfunctional SOEs

I was having a conversation with a good mate who happens to be in business, over the past week, and the conversation veered off into him expressing his frustrations with the current state of affairs and its negative impact on business people like him.

My mate happens to be operating in the electricity and power industry, servicing both public and private sector clients within the industry’s multi-faceted value chain. We were sitting at a restaurant experiencing load shedding challenges which meant that some of the items on the menu could not be ordered, which frustrated the both of us, as the unavailable menu options constituted some of the main things that we like this particular restaurant for.

Anyway, amidst this load shedding-induced frustration, my mate went on to tell me about a power station that one of the big metros in Gauteng privatised a few years ago, and how this particular power station was now producing excess capacity which we could be using but are not, because it is Eskom that must facilitate that excess capacity being put on the grid.

We both agreed that this was completely ridiculous and was just one more example of how state-owned monopolies were derailing our growth and development as a nation, due to inefficiencies caused by corruption, ineptitude, indifference and incompetence amongst other reasons.

We both also agreed that it is really stupid that there are people that are still arguing vociferously against privatisation of some state-owned entities, despite their inefficiencies crippling the economy, all because of some “stone age” belief in the innate progressiveness of state ownership as a “revolutionary” principle.

In thinking about all this, I was reminded of Joel Netshitenzhe’s words when he said, “Nationalisation in a context of entrenched corruption, weak corporate governance, patronage rather than meritocratic appointments, and disdain for the bottom-line (if our existing state companies are anything to go by), will not deliver improved outcomes with respect to employment, poverty reduction and reduced inequality.” Substitute the word nationalisation in Netshitenzhe’s quote with the phrase state ownership and the same principle still applies.

There is no point in punting state ownership of “strategic assets” within a country, which are supposed to play a positive role in our developmental trajectory, if those state entities are beset by entrenched corruption, weak corporate governance, patronage and disdain for the bottom-line, which is what we are currently experiencing in most of our state-owned entities.

Most of the people who are proponents of continued ownership of these state-owned entities, despite their obvious shambolic state, appear to miss or be ignorant of the point that the role of the state should be adjusted to the needs of the national economy, with more or less state ownership being advanced at any given point in time, based on what would be of benefit to the national economy and the nation as a whole.

We need stable, reliable power supply, which Eskom, for whatever reasons you may be personally comfortable with accepting is unable to give at present, so if guaranteeing that stable, reliable power supply requires that one privatise the whole thing, then so be it.

Privatise the whole damn thing if needs be, and leave the ideologues to go argue the merits and demerits of such a step in their elite, intellectual corners. The rest of us in South African society just want something that works, not banal ideological struggles that add no value to our lived experiences on a daily basis.

The issue is not whether one is for or against state ownership, but rather to reduce or increase state ownership and involvement in certain areas in ways that will enhance efficiency, enable economic growth, facilitate economic inclusivity and bring about better living standards for all of us as South Africans.

The debate over state ownership is old and stale and is of no interest to the majority of South Africans, what they want is something that works and is reliable and cost-effective, so that they can focus on improving their own lives and circumstances.

If state-owned entities aren’t contributing to that, then the most revolutionary and progressive thing to do - if putting the people’s interests first is truly the priority - is to sell those state interests off to those who will run them efficiently and optimally to their own benefit through making profit and that of society through better, more reliable, more cost-effective services.

Of course, the state would still play a role in regulating those sectors of the economy in which these state-owned entities that are sold off are operating in, to guarantee and ensure the public good, but even that need not be an antagonistic activity in the context of our developmental aspirations as a people. So, we need to stop this polarising South African phenomenon of tackling both/and issues with an either/or mindset.

So, whilst in agreement with sentiments of increasing or building state capacity in order to drive development, I don’t think that focusing on that precludes us from using private sector capacity to achieve our aims and objectives. In the words of Joel Netshitenzhe once again:

“In speaking of a developmental state, we are shifting away from an exaggerated state-centredness to stressing partnerships, from structure to relationships, and from blue-print planning to process. in the context of our particular transition, this approach to the state also underlines why we need to be thinking about the transformation/restructuring of the state and state assets…”

The point with all of this, is that it’s not about holding on to dogmatic, outdated ideological stances, but about finding out what would work best in each instance and then implementing it. So if at a certain period in time (like the present), we need to shed certain state assets in order to facilitate inclusive growth and development, then so be it.

What matters most is what would be of most benefit to South Africa and South Africans, or as so well articulated in the African National Congress’ 1969 Morogoro conference strategy and tactics document, the point is to ensure in every decision taken, that “the basic resources of our country are at the disposal of the people as a whole and not manipulated by sectors or individuals be they white or black.”

Mugabe Ratshikuni works for the Gauteng provincial government; He is an activist with a passion for social justice and transformation. He writes here in his personal capacity.