SOE Review: R100bn lost in two-years
27 June 2019
On Wednesday the Democratic Alliance (DA) wrote to the Minister of Public Enterprises, Pravin Gordhan, requesting a full-scale review of our failing and debt-ridden state-owned entities (SOEs), which have cumulative losses amounting to almost R100 billion. According to the National Treasury’s 2019 Consolidated Financial Statement report, loss making public entities raked up a consolidated loss of R50.65 billion in 2016/17 and R45.82 billion in 2017/18.
These financial losses increase on a daily basis and are proof that the status quo is no longer feasible. 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. Furthermore, several of these hundreds of SOEs duplicate functions and should not even exist in the first place.
The DA will continue to fight for this comprehensive review, which should be conducted to evaluate which SOEs are necessary, which SOEs need to be dissolved, which should be partially privatised, and which should be privatised in their entirety.
It is time to be pragmatic, and to stop playing politics. SOEs represent some of the biggest monopolies in the South African economy, and by conducting a comprehensive review, 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.
We cannot be sentimental about SOEs when they add little to no value to the people of South Africa and the economy. The country’s is in crisis, it therefore requires urgent reforms, starting with Eskom.
Issued by Natasha Mazzone, DA Shadow Minister of Public Enterprises, 27 June 2019