One year since Ramaphosa’s first Sona, and SOEs are still in a sorry state

In his reply to the State of the Nation (Sona) address debate yesterday, President Cyril Ramaphosa said government had “appointed qualified and capable people” to head some state-owned enterprises (SOEs).

However, it’s a song that has been sung before and despite the promises, SOEs are still in serious trouble, according to a report by the Centre for Development and Enterprise (CDE).

In 2017, President Jacob Zuma announced, in his reply to the Sona debate, that the department of small business development would “work with state-owned companies and enterprises as well as government departments, to ensure [small, medium and micro enterprises] benefit from the new 30% compulsory subcontracting policy.”

Graphic: Costa Makola

By then, many of the 131 SOEs were already buckling under crippling debt, but there was no mention of that in his Sona.

Denel, Eskom, the SABC and SAA were the obvious ones, with Denel only recently beginning to stagger to its feet. In his 2018 address, Ramaphosa acknowledged the depth of the problems.

“This is the year in which we will turn the tide of corruption in our public institutions,” he said.

Last year, Ramaphosa stated firmly he was “committed to building an ethical state in which there is no place for corruption, patronage, rent-seeking and plundering of public money”.

A few months on, the CDE report, Running out of Road, dropped.

“South Africa’s government and its state-owned companies have outstanding debts of over R3 trillion, a figure almost four times higher than in 2008 and 15 times higher than in 1992,” Ann Bernstein said in the report.

“Expressed as a percentage of GDP, debt now exceeds 60%, a return to the highest levels recorded at the end of apartheid. Critically, it shows little sign of slowing its upward trajectory.”

Last week, Ramaphosa said he was “firmly committed to only appointing people with the requisite skills, knowledge and experience – and to hold them accountable for their performance.

“Many of our state-owned enterprises are experiencing severe financial, operational and governance challenges, which has impacted on the performance of the economy and placed pressure on the fiscus,” he added.

Yesterday, he said Eskom and Transnet had recovered more than R2.3 billion between them of monies lost to corruption.

“We are determined all these funds must be found and returned, no matter where in the world we need to go to find them.”

– amandaw@citizen.co.za

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