Bloomberg News

South Africa Should Privatize State Companies, JSE Chairman Says

July 05, 2011

July 5 (Bloomberg) -- South Africa’s debate on nationalizing the country’s mining industry should be replaced by discussion on selling state-owned companies to private investors to drive efficiency, said Humphrey Borkum, chairman of JSE Ltd. which runs the continent’s biggest bourse

The ruling African National Congress agreed in September to study nationalization to meet demands from Julius Malema, head of its youth arm. Mine operators in South Africa are compelled by law to sell 26 percent of their assets to black investors by 2014 and boost numbers of black managers to help make up for discrimination during apartheid before 1994. Some companies missed targets for 2009, the mines minister said at the time, adding that the industry had “not lived up to the spirit and intent” of the law.

“The government has enough on its plate trying to fulfil its mandate of service delivery,” Borkum wrote in an opinion piece published in Johannesburg-based Business Report today. “To date, it does not have a consistent record of running municipalities, public schools, transport or parastatals with competence.”

If the government privatized state-owned companies such as Eskom Holdings SOC Ltd., the power utility, and ports and rail operator Transnet SOC Ltd., “the taxes they would pay would result in more money for better housing, schools and hospitals for the poor,” Borkum wrote.

To contact the editor responsible for this story: Ana Monteiro at amonteiro4@bloomberg.net


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