If the ANC doesn’t stop the rot at SOEs they will destroy SA
Given that the loss-making entities are in crisis, here is what’s needed to avoid an IMF bailout and a huge staff cull
The ANC government needs to decide whether the cost of lost economic growth to keep loss-making state-owned enterprises (SOEs) afloat is worthwhile. This comes as the ruling party lacks the political will to implement urgent organisational changes.
Collectively, national SOEs employ about 300,000 people. Since 1994, the government has given SOEs upwards to R2-trillion in bailouts, when adjusted to currency changes. Over the same period, SOEs have made similar amounts in losses, mismanagement and corruption.
If actuaries calculated the loss in growth, development and investment opportunities, they would probably reach similar numbers. Salaries, benefits and bonuses of SOEs have now outpaced market ones – and are disproportionate to the pedestrian productivity, performance and inefficiency of employees and SOEs. ..