South Africa’s state-owned enterprises (SOEs) are in crisis.
Last month, Finance Minister Malusi Gigaba issued dire warnings about South Africa’s state-owned power utility, Eskom, arguing that the rand and the economy more broadly would collapse if Eskom’s liquidity crisis was unresolved. The Public Investment Corporation then announced it has agreed to lend Eskom R5-billion to cover operating costs until the end of the financial year in March, despite opposition from trade unions and the Public Servants Association.
The problems at the Passenger Rail Authority of South Africa, SAA and the SABC are well documented and the problems with the SOEs have been highlighted by newly appointed President Cyril Ramaphosa.
Rather than engines of development, South Africa’s SOEs have become synonymous with mismanagement, corruption and cronyism and the epitome of post-apartheid state capture.