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Republic of South Africa - National Treasury, Asset Management Section

The Asset Management Section of the National Treasury was established in 1994 to provide the Minister of Finance with advice on the restructuring of state assets, the financial sustainability of State Owned Entities (SOE’s) and corporate governance issues related to SOE’s.

The Asset Management Section is part of the Asset and Liability Management Division of the National Treasury.  In addition to the above advice that is provided to the Minister of Finance, the role of the Asset and Liability Management Division is to protect the integrity of the National Revenue Fund.  This includes the evaluation of requests for guarantees, indemnities and securities and advising on treasury management. The Chief Director:  Asset Management reports to the Deputy Director-General:  Asset and Liability Management who in turn reports to the Director-General:  National Treasury.  The Director-General:  National Treasury reports to the Minister of Finance. 

The Asset Management Section's role

The Asset management Section provides advice and oversight in the following areas:

• Monitoring of financial sustainability of SOE’s;
• Advice on the transactions underlying restructuring of SOE’s;
• Recommendations regarding requests for guarantees, indemnities and securities;
• Recommendation on the approval of borrowings by Schedule 3(B) public entities;
• Ministerial correspondence, parliamentary questions, etc.;  and
• Advice on Corporate Governance issues. 

Structure

The Asset Management Section is structured as follows: 

Chief Director:  Asset Management

Directorate:  Corporate Governance

Directorate:  Investment Analysis

Directorate:  Treasury Operations

Directorate:  Development Finance Institutions

Directorate:  Energy and Telecoms

Directorate:  Transport and Defence 

Size of organisation

The Asset Management Section employees 27 people and have a budget of R12 million. The Asset Management Section monitors 18 Major Public Entities that are listed under the Public Finance Management Act (PFMA) under Schedule 2 and 31 National Government Business Enterprises listed under Schedule 3 (Part B) of the PFMA. A list of the above is provided as (Annexure A). 

Asset Management outputs

• Advice on restructuring of SOE’s through reports to the Minister of Finance;
• Analysis and benchmarking of financial statements of SOE’s;
• Monitoring and recommendations on borrowing, guarantees, indemnities issued to SOE’s, as well as those issued by Schedule 3(b) public entities;
• Recommendations to the Minister of Finance on corporate governance issues and appointment of Board Members;  and
• Comment on Cabinet Memoranda for the Minister of Finance. 

Strategic pillars and outputs

 The Strategic Pillars and outputs of the Asset Management Section are to: 

• Promote Optimal Allocation and Utilisation of Financial Resources:

- Exercise financial oversight and promote accountability by SOE’s;

- Financial performance monitoring of SOE’s;

- Reduction of contingent liability;  and

- Restructuring of SOE’s.

• Promote Sound Corporate Governance in SOE’s:

- Develop an appropriate role for National Treasury in the shareholder management model;

- Ensure an appropriate balance of risk and return is state investments by SOE’s;  and

- Redefine Development Finance Institution’s mandates.

• Contribute to the lowering of borrowing requirements:

- Develop a capital structure and financial distribution and financial distribution policies for SOE’s;  and

- Promote appropriate treasury risk management policies for SOE’s.

Major public entities

NO	SCHEDULE 2	DEPARTMENT
1	Air Traffic and Navigation Service Company	Transport
2	Airports Company of South Africa	Transport
3	Alexkor	Public Enterprises
4	Armscor	Defence
5	Central Energy Fund	Minerals and Energy
6	Denel	Public Enterprises
7	Development Bank of Southern Africa	National Treasury
8	Eskom Holdings (Pty ) Ltd	Public Enterprises
9	Industrial Development Trust	Public Works
10	Industrial Development Corporation of SA	Trade and Industry
11	Land and Agricultural Bank of South Africa	Agriculture
12	South African Broadcasting Corporation	Communications
13	South African Forestry Company	Public Enterprises
14	South African Nuclear Energy Corporation	Minerals and Energy
15	SA Post Office Limited	Communications
16	Telkom SA Limited	Communications
17	Trans-Caledon Tunnel Authority	Water Affairs and Forestry
18	Transnet Limited	Public Enterprises
NO	SCHEDULE 3B	DEPARTMENT
1	Albany Coast Water Board	Water Affairs and Forestry
2	Amatola Water Board	Water Affairs and Forestry
3	Aventura	Public Enterprises
4	Bloem Water	Water Affairs and Forestry
5	Botshelo Water Board	Water Affairs and Forestry
6	Bushbuckridge Water Board	Water Affairs and Forestry
7	Council for Mineral Technology - MINTEK	Minerals and Energy
8	Council for Scientific and Industrial Research - CSIR	Trade and Industry
9	Export Credit Insurance Corporation of SA Limited - ECIC	Trade and Industry
10	Ikangala Water	Water Affairs and Forestry
11	Inala Farms (Pty) Ltd	Land Affairs
12	Khula Enterprises	Trade and Industry
13	Lepelle Northern Water	Water Affairs and Forestry
14	Magalies Water	Water Affairs and Forestry
15	Mhlathuze Water	Water Affairs and Forestry
16	Namakwa Water	Water Affairs and Forestry
17	Ncera Farms (Pty) Ltd	Agriculture
18	Onderstepoort Biological Products	Agriculture
19	Overberg Water	Water Affairs and Forestry
20	Pelladrift Water Board	Water Affairs and Forestry
21	Public Investment Corporation Limited	National Treasury
22	Rand Water	Water Affairs and Forestry
23	SA Bureau of Standards - SABS	Trade and Industry
24	SA Rail Commuter Corporation Limited	Transport
25	SA Special Risk Insurance Association (SASRIA)	National Treasury
26	Sedibeng Water	Water Affairs and Forestry
27	Sentech	Communications
28	Umgeni Water	Water Affairs and Forestry
29	Umsobomvu Youth Fund	Labour

See website for more information: National Treasury