South Africa’s much-maligned state entities often come in for a lot of harsh criticism: But, if you look at the National Treasury’s recently-released 2019 Consolidated Financial Statement report, it becomes apparent why these SOEs have brought this country to its knees.
SOEs: The worst offenders
The likes of Eskom, SAA and Denel are all in a financial black hole that threatens to swallow Mzansi whole. With debts at Eskom pushing the half-a-trillion-rand mark, it’s hard to see just what kind of interventions could stop the rot. The power utility is set to receive R230 billion over the next five years, according to Cyril Ramaphosa’s SONA speech
But bailouts are not guarantees. We’ve learned that the hard way over the past few years, and as the DA are keen to point out, recent interventions have done very little to arrest the SOE slides.
How much money are South Africa’s SOEs losing?
The party approached Public Enterprises Minister Pravin Gordhan on Wednesday, requesting clarity on the loss-making businesses. This, after the Treasury’s report lifted the lid on some pretty harrowing details. Here are the estimated losses made since 2016, according to the government.
- SOE losses from 2016/17: R50.65 billion.
- SOE losses from 2017/18: R45.82 billion.
- Total losses over a two-year period: R96.46 billion.
Natasha Mazzone slams “insurmountable debt”
The fact the losses were cut by almost 10% in the most recent fiscal year was no crumb of comfort for Natasha Mazzone. The shadow minister and Gordhan’s opposite number fumed at the scarcely-believable figures and called for cross-party cooperation to completely overhaul the way state-owned businesses work in South Africa:
“South Africa’s SOEs must, as a matter of urgency, be completely overhauled. Their insurmountable debt poses great risks to our economy and the functioning of our societies, as many of them are bankrupt and completely unable to provide the services they are mandated to deliver. ”
“SOEs represent some of the biggest monopolies in the South African economy, and by conducting a comprehensive review, the government would be providing citizens with a clear indication that they are willing to start the process of structural change to protect our economy from further financial losses.”