State entities a drain on economy

real prices after a decade of privatization had fallen 50% for telecommunications, 50% for industrial gas and 25% for residential gas.”

Electricity prices were down more than 25% within 10 years of privatisation.

The performance of businesses before and after privatisation has been the focus of intense scrutiny.

Edwards writes: “A 1994 study in the Journal of Finance looked at 61 privatisations in 18 countries and found ‘strong performance improvements, achieved surprisingly without sacrificing employment security. Specifically, after being privatised, firms increased real sales, become more profitable, increased their capital investment spending, improved their operating efficiency and increased their work forces’.”

Our blighted SOE sector in South Africa must be privatised as soon as possible. There is simply no justification for continuing to inflict so much pain by way of power blackouts, bailout shocks, political patronage, public-fund haemorrhage and poor delivery and service. That anyone – save the trade unions (who needlessly fear job losses), corrupt politicians and their deployed cadres in SOEs – still wants these rent-seeking monstrosities beggars belief.

Politically, no challenge could be greater. Economically, the benefits would be dramatic. ●