BOKAMOSO
SOEs should be run the DA way
It is fair to say that our state-owned entities are in a monumental mess. Many have been reduced to archaic, over-staffed, money-eating monopolies, more fronts for patronage and looting than drivers of development. Their mishandling has pushed the SA government to the brink of financial collapse. State capture (estimated cost R100 billion) has been exposed and some boards have been replaced but make no mistake, our SOEs are by no means out of the woods. They need urgent reform.
SOEs are public entities that use mostly public money and are meant to deliver services to the public: either services that private companies cannot or will not deliver, or services at a lower price than could be delivered privately. In theory, their role is to create an environment of prosperity and opportunity in SA.
In practice, many do the exact opposite. Overall, loss-making SOEs cost the public R53.7 billion in the 2016/17 financial year. The tangible cost to the poor is terrible: hundreds of thousands of RDP houses could have been built; or thousands of black farmers empowered with skills, capital and productive land; or hundreds of thousands of young people put through university; or hundreds new schools built.
Instead, not only service delivery but our economy itself is being sacrificed on the altar of government incompetence, corruption and failed ideology. SOE’s are a massive risk to SA’s economy and a key reason behind its stagnation. A cumulative R466 billion of SOE debt is guaranteed by the government, meaning that if SOE’s are unable to repay loans, the government (ultimately the taxpayer) will be forced to cough up. R300 billion has already been borrowed against these guarantees.