South Africa needs fresh thinking, tough decisions and decisive action to deal with state-owned entities weighing down the economy.
This week the South African Post Office asked Parliamentarians for about R5bn, the SABC wants R1.5bn and airports company ACSA said it needs R3.5bn to maintain activities, reports Reuters. State arms manufacturer Denel has a liquidity crisis and Eskom’s performance is worse than budgeted.
Parliament heard that funds are needed to help SOEs ‘weather the impact’ of Covid-19. But we all know these lumbering beasts have been major sites of state capture, which has ‘damaged their financial health, management, and functioning’, as the Organisation for Economic Co-operation and Development notes.
In its South Africa report, the OECD says one of its key recommendations has been for the country to address bribery – but many investigations specifically involving SOEs ‘have not progressed to prosecutions’. Like many South Africans, OECD officials believe better enforcement of corruption offences will help to fix SOEs – and, in turn, improve investor confidence and facilitate repair to the damaged economy.
This also seems to be the thinking of President Cyril Ramaphosa, who has been repeating his message that corruption and patronage need to be excised from the civil service and beyond. His greatest challenge: ANC comrades, many of whom he relies on for support, have a strong presence in the SOE feeding trough.
PS: Corruption & The State of the Nation is the theme of this week’s BizNews Thursday noon webinar. Joining veteran broadcaster Tim Modise are political analysts Judith February, Daniel Silke and Professor Tinyiko Maluleke. Sign up here: https://attendee.gotowebinar.
