Mboweni to SOEs: ‘The days of Father Christmas are over’
Bailout days are over as minister stresses that the help struggling state-owned companies get must be repaid
The national treasury is proposing harsher measures to deal with rising state-owned company bailouts, public-sector compensation and wastage which could sink the country into a debt trap if action is not taken immediately .
On Wednesday, finance minister Tito Mboweni revealed that the national treasury was creating a dedicated liquidity facility to assist struggling state-owned companies. But this was to ensure the government could differentiate between an equity injection and a loan, “with a clear directive that the loan will be repaid”, he said.
“At the moment there’s confusion between an equity injection and a loan. State-owned companies that don’t run well, say they can always go to Father Christmas. Those days are over.”..