Reforming SOEs will be a critical lever in SA’s future development

The government is intensifying efforts to reform state-owned enterprises because it believes this will improve growth and restore public trust.

Edwin Besa is deputy director-general: Public Entities Oversight and Support within the Department of Planning, Monitoring and Evaluation, and leads the implementation of the State-Owned Entities Monitoring Framework.

South Africa’s development trajectory is inseparable from the performance and reform of its state-owned enterprises (SOEs). As the government intensifies efforts to build a capable, ethical and developmental state, the reform of SOEs has emerged not only as a governance priority, but as a central instrument for driving inclusive growth, improving service delivery and reducing fiscal risks.

At the heart of this reform agenda is a fundamental recognition that the SOEs were established to serve strategic national objectives. At their optimal performance, SOEs can accelerate development outcomes and improve growth and public trust, and lessen the strain on the public purse.

Recent developments within the Department of Planning, Monitoring and Evaluation (DPME) signal a shift towards a more coordinated and integrated SOE reform approach. The establishment of a dedicated SOE Reform Unit marks an important institutional step towards strengthening oversight, governance and sustainability across the SOE portfolio.

Crucially, this reform effort is not occurring in isolation. It is anchored within a broader planning framework that aligns SOE performance with national priorities, including the Medium-Term Development Plan 2024-2029 and the National Development Plan (NDP) Vision 2030.

This alignment is essential as development outcomes, such as economic growth, infrastructure expansion and improved service delivery, cannot be realised without clear coherence between policy, planning and implementation. By ensuring that SOEs are integrated into this planning architecture, the government is laying the groundwork for more coordinated and impactful interventions.

A key pillar of the reform process is the rationalisation and restructuring of SOEs. The DPME is working with key stakeholders, including the Presidential State-Owned Enterprises Council, to reposition 26 major SOEs, including Water Boards, so that they are optimally configured to support national development priorities.

This effort speaks to a broader challenge that has long characterised the SOE landscape: fragmentation, duplication of functions and misalignment with national objectives.

Rationalisation is therefore not simply about reducing numb