South Africa’s State Owned Enterprises Are Destroying The Economy, SAA Has Lost R18 Billion!


SAA, Eskom, SANRAL, PETROSA, SAPO and PRASA are the largest offenders among South Africa’s state owned enterprises (SOEs) that are costing the nation’s economy huge billions of rand.

The aforementioned SOEs made a combined loss of R15.5 billion for the 2014/2015 financial year and are currently holding R408.9 billion in government guarantees between them.

Read Also: FNB Will Shutdown 40 Branches And Axe 600 Workers

Those are based on comments made by the DA Shadow Minister of Public Enterprises, Natasha Mazzone during a recent press conference in Parliament on the Privatization of SAA (South African Airways).

At the press event, Mazzone disclosed that SAA “has been plagued with financial problems for over a decade now with assessed losses of R18 billion.”

Indicating that there’s little sign of turnaround in sight for SAA, the shadow minister revealed that the airline is increasingly facing concerns over cash flow and liquidity. The airline as gathered, called on Treasury to bail it out and some of the concerns highlighted are as under-listed.

  • The airline incurred a R.2.5 billion in the 2013/14 financial year;
  • An investigation by auditors at SAA found that the airliner had made an R648m loss in the first six months of the current financial year;
  • And currently, the South African government has provided guarantees totaling R14.4 billion.

It was further revealed that Treasury gave R14 billion to SAA in guarantees over the last 15 years which has supported a staff component of 11,491 in 2014.

“This means that it has cost government R1,218,344 per employee to keep these jobs,” Mazzone explained.

With the foregoing, Mazzone warned that the “ANC government cannot continue to prop up failing SOEs simply to placate COSATU…It is time for the ANC to take a stand against its alliance partners and be bold in admitting that the current configuration isn’t working.

We cannot continue to pour billions into SOEs while millions of South Africans are without opportunities to work and study…the ANC cannot allow those on its left to hold the economy to ransom and increase the risk of a ratings downgrade, Mazzone stressed.

See Also: ‘Nothing Can Prevent SA’s Economy From Reaching Junk Status’ – Chris Hart

Like BuzzSouthAfrica: