SA politics still trumps sense on SOEs

THREE years ago, former Finance Minister Tito Mboweni stood at the podium of the National Assembly and flagged Eskom as South Africa’s biggest economic risk.

Three years later Eskom’s inability to deliver on its basic function –the provision of electricity – still hobbles South Africa’s economy as ordinary citizens and industry have to make alternative plans to keep the lights on.

Government should be lauded for its response to the Covid pandemic despite the fact that criminals sought to loot funds through tender corruption.

Delivering his Medium-Term Budget Policy Statement yesterday, Finance Minister Enoch Godongwana conceded that despite billions spent on reversing Eskom’s fortunes, there’s hardly been any improvement in the utility’s ability to supply electricity and its financial health.

For this reason, Godongwana said government would take on a significant chunk of Eskom’s R400 billion debt. Transnet gets R2.9bn, and an additional R2.9bn from in-year adjustments; Denel, which until recently could not pay staff, gets R3.4bn.

Like most things in South Africa, solutions to dealing with the struggling SOEs are staring government in the face but political considerations seemingly trump common sense.

Even when government seeks to do the right thing with SOEs, like privatising SAA, it has either been bungled or mired by incompetence. This is because opponents from within the ANC, and outside, view SOEs as a vehicle for self-enrichment.

Godongwana also addressed the controversial Gauteng Freeway Improvement Project, stating that national government will contribute 70% to settling debt, while the Gauteng provincial government will be saddled with the balance of 30%.

But the controversial bits were left out: there was no mention of road users paying for e-tolls, a politically sensitive issue for the ANC.

Government’s decision to extend the Social Relief of Distress monthly grant of R350 to the end of March 2024 should be lauded, but a more sustainable solution to support South Africa's chronically unemployed is needed.

While the largest chunk of the R2.48 trillion spending bill over the next three years will be allocated towards education, health and social development, South Africans should demand more accountability from these departments.