South Africa’s state owned enterprises (SOEs) are costing our economy billions with the largest offenders – including SAA, Eskom, SANRAL, PETROSA, SAPO and PRASA – having made a combined loss of R 15.5 billion for the 2014/2015 financial year and currently holding R 408.9 billion in government guarantees between them.
With the South African economy in crisis, and the threat of a ratings downgrade to junk status looming on the horizon, the ANC government cannot continue to prop up failing SOE’s.
“The DA believes that the only viable solution to the problem of our ailing SOE’s is to initiate a privatisation programme, guided by Treasury, to begin a process of disposing of increasingly inefficient and mismanaged state entities., said Natasha Mazzone from the DA.
“We must initiate an urgent process of privatisation to dispose of these liabilities, and this process must start with SAA.
Over the past couple of years keeping SAA flying has proven to be costly endeavour for the South African taxpayer.
The unprofitable airline has become a fiscal black-hole into which billions of Rands have been pumped with no return on investment,” added Mazzone.
The financial position of SAA can be summarised as follows:
- In the 2013/14 financial year, the airline incurred a loss of R2.5 billion.
- The 2014/15 financial statements are yet to be finalised, in itself a major area for concern.
- 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.
- Currently the South African government has provided guarantees totalling R14.4 billion.