State-owned enterprises of South Africa
In South Africa the Department of Public Enterprises is the shareholder representative of the South African Government[1] with oversight responsibility for state-owned enterprises in key sectors. Some companies are not directly controlled by the Department of Public Enterprises, but by various other departments.
State-owned enterprises play a significant role in the South African economy. In key sectors such as electricity, transport (air, rail, freight, and pipelines), and telecommunications, SOEs play a lead role, often defined by law, although limited competition is allowed in some sectors (i.e., telecommunications and air). The government’s interest in these sectors often competes with and discourages foreign investment.[2]
The Department of Public Enterprises minister has publicly stated that South Africa’s SOEs should advance economic transformation, industrialization and import substitution. DPE has oversight responsibility in full or in part for six of the approximately 700 SOEs that exist at the national, provincial, and local levels: Alexkor (diamonds), Denel (military equipment), Eskom (electricity generation), Transnet (railway transport and pipelines) South African Express, South African Forestry Company (SAFCOL) (forestry), South African Broadcasting Corporation and Transnet (transportation). These seven SOEs employ approximately 105,000 people. The SOEs share of the investment was 21% while private enterprise contributed 63% (government spending made up the remainder of 16%). The IMF estimates that the debt of the SOEs would add 13.5% to the overall national debt.[2]
History
Many state-owned firms were established during the apartheid era to counter the impact of international sanctions against the country.[3] The ANC government initially sold stakes in the companies, and lowered import tariffs. Those measures were reversed following opposition from COSATU and the South African Communist Party.[3] By 2007, an alliance of unions and leftist factions within the ANC had unseated President Thabo Mbeki, replacing him with Jacob Zuma.[3] The new ANC policy aimed at expanding the role of SOEs in the economy, following the example of China.[3]
Although in 2015 and 2016, senior government leaders discussed allowing private-sector investment into some of the more than 700 state-owned enterprises and recently released a report of a presidential review commission on SOE, which called for rationalization of SOEs, no concrete action has been taken on the topic yet.[2]
Financial troubles and corruption
By the end of the Zuma administration in 2018 corruption within South African state owned enterprises by individuals connected to government such as the controversial Gupta family had led to many enterprises facing deep financial difficulty.[4] Deepening financial issues and government bailouts of enterprises such as the South African Broadcasting Corporation,[5][6][7] South African Airways,[8][9][10] Eskom,[11][12], Denel[13][14] and Transnet caused increased public controversy. By the end of 2015/16 combined government guarantees on debts owed by state owned enterprises had reached R467 billion (equivalent to US$33.1 billion) and were expected to reach R500 billion by 2020 representing 10 percent of South Africa's GDP.[4] The situation at Eskom was regarded as so serious as to lead the South African business newspaper Business Day to speculate that it could cause a national banking crisis.[15]
List
Name | Industry | Notes | Employees | Revenue | Profit/(Loss) | Ownership type | Established |
---|---|---|---|---|---|---|---|
Airports Company South Africa (ACSA) | Airport management | Owner and operator of major airports. | 3,110 | R2.86bn | R0.23bn | 74.6% government owned | 1993 |
Alexkor | Mining | Diamond mining. | 859[16] | R0.2bn[16] | R0.03bn | Fully government owned | 1992 |
Armscor (South Africa) | Arms procurement | Arms procurement agency for the SANDF. | 1,467 | R1.75bn | R0.23bn | Fully government owned | 1968 |
Broadband Infraco | Telecommunications | Long distance & international internet connectivity. | 166 | R0.41bn | (R0.01bn) | Fully government owned | 2007 |
Council for Scientific and Industrial Research | Research & Development | National research organisation | 3,000 | R2.5bn | R0.007bn | Fully government owned | 1945 |
Central Energy Fund | Research & Development | Energy development. Parent company of PetroSA. | 2,107 | R13.2bn | (R0.45bn) | Fully government owned | 1954 |
Denel | Arms procurement | Armaments manufacturer. | 3,968 | R3.76bn | (R1.75bn) | Fully government owned | 1992 |
Development Bank of Southern Africa | Banking | Funding for social and economic infrastructure. | 492 | R5.6bn | R3.1bn | Fully government owned | 1983 |
Eskom | Public utility | Electrical production, transmission and distribution monopoly. | 46,665 | R179.8bn | (R20.7bn) |
Fully government owned | 1923 |
PBMR | Research & Development | Development of Pebble Bed Modular Reactor nuclear energy technology | 900 | 1994 | |||
Passenger Rail Agency of South Africa | Railways | Passenger railway services | 16,350 | R13.65bn | (R1.69bn) | Fully government owned | 1990 |
PetroSA | Energy | National oil and gas company | 1,594 | R10.3bn | (R1.6bn) | Fully government owned | 1965 |
South African National Parks | Nature conservation | Owner and operator of national parks. | 4,181 | R2.6bn | R0.2bn | Fully government owned | 1926 |
South African Post Office | Postal services | National postal services | 18,119 | R4.5bn | (R0.9bn) | Fully government owned | 1991 |
Rand Water | Public utility | Water utility for Gauteng province. | 3,411 | R13.4bn | R3.15bn | Fully government owned | 1903 |
Sasol | Energy | International coal-liquefaction, petroleum refining and distribution. | 30,100 | US$21.7bn | US$3.11bn | 27.3% government owned[17] | 1950 |
Sentech | Telecommunications | Telecommunications infrastructure | 531 | R1.4bn | R0.18bn | Fully government owned | 1996 |
South African Airways | Transport | International airline | 10,071 | R30.7bn | (R5.4bn) | Fully government owned | 1934 |
South African Broadcasting Corporation | Broadcasting | South African public service broadcaster | 3,167 | R6.4bn | (R0.6bn) | Fully government owned | 1936 |
South African Express | Transport | Regional airline | 980 | 1994 | |||
South African Forestry Company | Forestry | Manages forestry on state owned land | 2,363 | R0.93bn | (R0.08bn) | Fully government owned | 1992 |
South African National Roads Agency | Infrastructure | Maintenance and development of the national road network | 397 | R3,6bn | R1.01bn | Fully government owned | 1998 |
Transnet | Transport | Railways, harbours, oil/fuel pipelines and terminals | 55,946 | R74bn | R6.04bn | Fully government owned | 1990 |
Trans-Caledon Tunnel Authority | Public utility | Water transport authority | 141 | R2.3bn | R2.1bn | Fully government owned | 1986 |
Telkom SA | Telecommunications | National telephone monopoly | 18,286 | R41bn | R4.9bn | 39.8% government owned[18] | 1991 |
Vodacom | Telecommunications | Cellular services | 7,554 | R86.4bn | R24.5bn | 13.9% government owned[18] | 1994 |
See also
External websites
References
- ^ "State Owned Companies", Department of Public Enterprises, Republic of South Africa. Retrieved 2017-01-28.
- ^ a b c "South Africa - State Owned Enterprises". US State Department's Office of Investment Affairs. Retrieved 21 February 2018.
This article incorporates text from this source, which is in the public domain.
- ^ a b c d "Commanding plights". The Economist. 27 August 2015. Retrieved 21 February 2018.
- ^ a b Mutize, Dr Misheck; Gossel, Sean. "Corrupt state owned enterprises lie at the heart of South Africa's economic woes". The Conversation. Retrieved 2018-12-13.
- ^ "SABC in financial crisis, admits acting CEO". News24. 2017-05-10. Retrieved 2018-12-13.
- ^ Sokutu, Brian. "Why Hlaudi mostly to blame for SABC financial crisis". The Citizen. Retrieved 2018-12-13.
- ^ "Finances at SABC are so dire that it cannot pay content providers". www.businesslive.co.za. Retrieved 2018-12-13.
- ^ "SAA in far deeper trouble | IOL Business Report". www.iol.co.za. Retrieved 2018-12-13.
- ^ Bateman, Chris (2018-05-17). "SAA's full financial distress exposed – rehab starts". BizNews.com. Retrieved 2018-12-13.
- ^ "South African Airways 'near bankruptcy'". BBC News. 2017-08-03. Retrieved 2018-12-13.
- ^ "Bloated Eskom falls deeper into financial crisis – Natasha Mazzone - POLITICS | Politicsweb". www.politicsweb.co.za. Retrieved 2018-12-13.
- ^ "EDITORIAL: How Eskom could cause a banking crisis". www.businesslive.co.za. Retrieved 2018-12-13.
- ^ "Denel has a R2.34-billion debt problem - and no plan how to tackle it". www.timeslive.co.za. Retrieved 2018-12-13.
- ^ "For Denel to survive, it needs partners, soon, warns Armscor's Kevin Wakeford". www.businesslive.co.za. Retrieved 2018-12-13.
- ^ "EDITORIAL: How Eskom could cause a banking crisis". www.businesslive.co.za. Retrieved 2018-12-13.
- ^ a b "Alexkor Annual Report: 2018" (PDF). Alexkor. 31 March 2018.
- ^ "Major shareholders", sasol.co.za. Retrieved 2017-01-28.
- ^ a b "Here is Government’s shareholding in South African telecoms companies", mybroadband.co.za, 23 June 2015.