State-owned enterprises (SOEs) are some of the biggest risks to the South African economy, with losses and bailouts running into billions each year.
Over the last decade, under Jacob Zuma’s leadership, SOEs like Eskom, Prasa, SAA, and the SABC have been gutted by corruption and mismanagement.
It became so bad that ratings agencies like Standard & Poor’s pointed to SOEs as a major reason for the downgrade of South Africa’s credit rating.
Finance Minister Nhlanhla Nene, for example, said Eskom is the single biggest risk to South Africa’s economy.
Even the ANC government admitted the dire state of these companies, with President Cyril Ramaphosa describing SOEs as “sewers of corruption”.
The government is now trying to fix these companies, but considering the loss of skills and the systemic corruption, it is a near-impossible task.
To see what the government is up against, this article provides a quick overview of the losses of prominent SOEs in their last financial year.
As a concerning addition, we added how much money each of these institutions loses per second.
SAA – R5,670,000,000 loss
In March this year, South African Airways released its financial results for 2017, which revealed a loss of R5.7 billion.
This huge loss was almost R3 billion more than predicted.
Eskom – R4,608,000,000 loss
Eskom released its financial results for the 2017/2018 financial year in July, which revealed a loss of R4.6 billion.
What was particularly disturbing was that the power utility’s irregular expenditure rose from R3 billion to R20 billion over the last year.
Prasa – R928,000,000 loss
In September, the Passenger Rail Agency of South Africa (Prasa) presented its 2016/17 financial results, revealing a loss of R928 million.
Prasa board chairperson Khanyisile Kweyama said: “We came into an organisation that is broken. We are here to fix a broken organisation.”
SABC – R622,000,000 loss
In September, the SABC reported a loss of R622 million for the year ended 31 March 2018.
Auditor-General Kimi Makwetu said the SABC was commercially insolvent as it was unable to pay its debts on time.