South African state-owned enterprises (SOEs) have become synonymous with crippling debt, and there is no sign that this situation is improving.
The DA recently wrote to Minister of Public Enterprises Pravin Gordhan requesting a review of South Africa’s SOEs.
The party accused SOEs of having accumulated losses that, when tallied, amount to R96 billion over the past two years.
“These financial losses increase on a daily basis and are proof that the status quo is no longer feasible,” the DA said.
Eskom – A big failure
Eskom recently announced a record loss of R20.7 billion for the year – partially due to its increasing and unsustainable debts.
Eskom has amassed a total of R440 billion in debt, and Eskom CFO Calib Cassim said this debt needs to be reduced to R200 billion before the entity can become sustainable.
As a result, the power utility has been promised a R69-billion bailout spanning until 2021, with a further R59-billion bailout also proposed to span the next two years.
The financial issues at Eskom have been compounded by senior managers taking the power utility to the CCMA to demand increases to their salaries and bonuses.
These managers, who already earn between R1.5-3 million per year, are requesting a minimum salary increase of 4.7%.
The SABC has also been suffering financially, and there were reports that it would no longer be able to pay salaries.
However, SABC CFO Yolande van Biljon said the public broadcaster has no worries about a potential Day Zero for at least the next three months.
“We are not out of the woods yet, but we are making progress as far as improving our balance sheet,” said Van Biljon.
Despite this, Communications Minister Stella Ndabeni-Abrahams said the SABC needs urgent financial assistance.
“The SABC has been experiencing liquidity problems due to historic financial management issues and the rapidly rising costs of content,” said the minister.
Eskom and the SABC are not the only SOEs suffering under the weight of financial strife.
In fact, almost all of South Africa’s leading SOEs are entrenched in debt – a fact which should cause serious concern in South Africans.
The table below highlights the debt faced by some of South Africa’s biggest SOEs.
|South African SOE debt|
|Broadband Infraco||R2.4 billion|
|SA Post Office||No debt|