Minister puts in motion tough love for wasteful SOEs

Finance Minister Enoch Godongwana has revealed that the country has blown more than R308-billion on failing state-owned enterprises (SOE) at the expense of service delivery in the last nine years.

Godongwana said the budget for frontline services such as health, education and policing has since 2013 been reduced by R257-billion bailing out the SOEs, some of which had become sites of looting enabled by state capture.

He was speaking during his maiden Budget speech in parliament on Wednesday.

State companies would need to develop and implement sustainable turnaround plans, Godongwana said, adding that their future would be informed by the value they created and whether they could be run as sustainable entities without bailouts from the fiscus.

“Some state-owned companies will be retained, while others will be rationalised or consolidated. To reduce their continuing demands on South Africa’s public resources, the National Treasury will outline the criteria for government funding of state‐owned companies during the upcoming financial year.

“This, madam speaker, is what we mean by tough love. We are aware that Eskom’s debt situation remains a concern for its creditors and our investors alike,” he added.

George Matlala

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