Rautenbach’s

Africa Can Work

ASPECIAL place in hell must be reserved for stateowned enterprises (SOEs). What makes these entities particularly loathsome is the fact that they purport to do work which can just as easily be done by the private sector much more costeffectively and at higher levels of service quality. And meanwhile, they serve as a rent-seeking feeding trough for the powerful and the wellconnected.

According to the DA, South African Airways (SAA), Eskom, the South African National Roads Agency Limited (Sanral), PetroSA, the South African Post Office (Sapo) and the Passenger Rail Agency of South Africa (Prasa) made a combined loss of R15.5 billion for the 2014/15 financial year and in 2016 held R408.9bn in government guarantees between them.

In 2015, PetroSA reported a loss of R14.5bn, the biggest loss ever incurred by a state company in the nation’s history. This is money the country can ill afford at a time when it is struggling to meet its own budget.

SAA’s going-concern status rests on government guarantees of R19.1bn. In the 2016/17 financial year alone, it incurred a loss of R4.5bn.

SAA has been bailed out 13 times in recent years. One of the difficulties is that government regulates the airlines with a barely disguised monopolistic attitude.

To its credit, in recent years government has permitted private