Futuregrowth: ANC says loan suspension was premature; DA says it’s ‘a vote of no confidence in Zuma’

The African National Congress (ANC) on Thursday described as “erroneous and unfortunate” the “generalisation that corporate governance challenges beset” the country’s state-owned enterprises (SOE).

The party‚ through spokesperson Zizi Kodwa‚ said it “has noted the decision by Futuregrowth Asset Management to suspend loans to a number of SOEs…(as) a result of concerns the asset manager has in relation to governance and decision-making at these institutions”.

“The ANC is concerned by the posture adopted by Futuregrowth. It is our hope that Futuregrowth will engage with the relevant ministries and parastatals to discuss the concerns they have; and together find a solution in the interest of the economy and country‚” Kodwa added.

• South African asset manager halts loans to state firms citing 'power struggle' in governmentSouth African fixed-income asset manager Futuregrowth has halted lending to six state-owned firms, including power utility Eskom and logistics firm Transnet, it said on Wednesday citing political uncertainty. 

He said the ANC’s “commitment to ensuring they are models of good corporate governance‚ independence and sound technical capacity is not in doubt”‚ but added: “Where necessary‚ the ANC-led government must not hesitate to comprehensively respond and act on any concerns regarding their governance frameworks and institutional integrity.”

Kodwa said interventions “made to strengthen these institutions included the establishment of an inter-ministerial committee chaired by Deputy President Cyril Ramaphosa‚ to oversee their stability and reform‚ with specific focus on their governance frameworks”.

“Accordingly‚ we believe that Futuregrowth‚ or other any investor‚ should await the outcome of these interventions before taking any preemptive stance‚” he said.

Democratic Alliance leader Mmusi Maimane‚ however‚ described Futuregrowth’s decision to withhold additional funding to a number of SOEs as “a vote of no confidence in President Jacob Zuma”.

He said Futuregrowth’s announcement that it would only proceed with financing SOEs when “proper oversight and governance” have been restored at the companies was “a clear swipe at Zuma and his project of state capture”.

Maimane quoted Futuregrowth saying “recent reports that strongly hint of conflict between branches of South Africa’s government‚ the possible machinations of patronage networks and a seeming challenge to the National Treasury’s independence”. He noted that Futuregrowth’s action comes “just weeks after the absurd Cabinet decision to place the president in charge of overseeing all SOEs”‚ and argued that “restoring confidence requires that Zuma desists from his attempt to centralise control over SOEs in himself‚ and affirms the independence of the Treasury”.

“South Africa’s SOEs are in a dire state costing the country billions as government continues to prop them up despite their immense losses. At the root of their mismanagement is large-scale corruption that feeds an ANC patronage network headed up by Zuma.”