ANC government needs to be stopped from wasting billions on failing SOEs

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Published May 2, 2024


COME May 29 elections, South Africans should vote to stop the ANC government from wasting trillions more rand, by channelling billions worth of taxpayers money into keeping state-owned entities (SOE) on life support for the benefit of connected cadres.

Despite celebrating a false ‘new dawn’ under President Cyril Ramaphosa, the DA said the governing party had in reality failed to revive SOEs and instead thrown hundreds of billions into them with no positive return for taxpayers.

The party’s Dr Mimmy Gondwe said this was revealed during parliamentary questions. The government led by the ANC had over the past five years spent R283 billion bailing out a number of state-owned entities including Eskom, Denel, Transit and SAA, with no returns.

Returns were only realised, according to Gondwe, from the South African Forestry Company Soc Limited, the third largest state-owned forestry company in the country, which declared a R1 million dividend to the government shareholder.

The DA’s Public Enterprises spokesperson said this was a shocking return on investments that exposed how the ANC-led government’s SOE model had collapsed public finances and also exerted a heavy toll on already overburdened taxpayers.

Gondwe said Public Enterprises Minister Pravin Gordhan had tried to justify this wasteful expenditure as capital investment, and argued that the expenditure was a necessary cost to carry because SOEs needed to be rescued from the damage done by state capture, and not bailouts.

However, she explained that this argument was disingenuous because taxpayers did not have to carry this cost to begin with.

“If Ramaphosa was serious about SOE reform, he should have opened up the SOE sector to private investment and public-private partnerships from the beginning of his tenure. By sticking to an outmoded system of full state control, the SOEs remained trapped in fault lines of structural inefficiency, unviable business models and lack of competitiveness.

“Over the past five years, the ANC government has been throwing good money at dysfunctional entities, naively hoping that this would fix SOEs. It has not, and after almost a quarter of a trillion in ‘capital investment’, as Gordhan would have us believe, SOEs are still struggling as they were five years ago,” Gondwe said.

Towards the end of 2023, the Auditor-General of South Africa, Tsakani Maluleke, also raised concerns about the dismal performance of numerous SOEs.

Maluleke, while tabling the audit outcomes for national and provincial governments for the year to end March 2023, stressed that while there was a trend of improvement for smaller parastatals and some government departments, the country’s key SOEs had once again underperformed.

The AG revealed that only 10 SOEs that had received unqualified audits with findings, two received qualified audits with findings, and another two, the SABC and SA Post Office, had received disclaimers.

Four entities, Alexkor, Denel, SAA and Eskom, had, according to the AG, outstanding audits as they did not submit their financial documents in time.

The Star