IFP calls for debate on ailing state-owned enterprises

Chief Whip of the IFP, and MP, Narend Singh. Picture: Theo Jeptha/ African News Agency (ANA)

Chief Whip of the IFP, and MP, Narend Singh. Picture: Theo Jeptha/ African News Agency (ANA)

Published Oct 11, 2023


Durban — The IFP in Parliament has written to the speaker of Parliament, Nosiviwe Mapisa-Nqakula, to request an urgent motion for a debate on the state of state-owned enterprises (SOEs) in South Africa.

IFP national spokesperson and MP Mkhuleko Hlengwa said SOEs had been facing immense challenges in recent years, including financial mismanagement, corruption, and operational inefficiencies. He said these issues had led to not only significant financial burdens on taxpayers but also had a detrimental impact on the delivery of essential services to citizens.

The IFP called for an urgent parliamentary intervention to address the critical situation. The motion sought to open a comprehensive discussion on the following key issues:

¡ Financial mismanagement: Many SOEs are grappling with financial instability due to mismanagement, leading to huge losses and financial burdens on the state.

¡ Corruption and maladministration: Rampant corruption and maladministration within SOEs have eroded public trust and hindered their ability to fulfil their mandates effectively.

¡ Service Delivery: The deterioration of SOEs has directly affected the delivery of essential services such as energy, transportation, and health care, impacting the quality of life for South Africans.

¡ Accountability and governance: Ensuring accountability within SOEs is vital to their recovery and long-term sustainability.

“The state of our SOEs is a matter of national concern. It is crucial that Parliament takes immediate action to address these issues and hold those responsible accountable. Our citizens deserve efficient and accountable public enterprises that can contribute positively to our nation’s development,” Hlengwa said.

He said the debate on the failing state of SOEs underscored the IFP’s commitment to good governance, transparency, and accountability in South Africa’s public institutions.

Chief whip of the IFP, and MP, Narend Singh, said the country was facing a severe problem with its public sector entities, as they were failing to deliver crucial services to citizens. He said SOEs had been draining the economy.

“National Treasury has offered Eskom R254 billion in debt relief to pay the total of R423bn it owes to global financial institutions. This bailout comes at a cost to the country, as Eskom’s total debt is almost equal to the total national budget for education. Furthermore, consistent load shedding has shaved nearly 2% off South Africa’s economic growth for this year alone,” Singh said.

Eskom is faced with an immense leadership crisis as it has been without a CEO since February. Singh said that with these vital positions vacant, Eskom had been left without anyone accountable to deliver on the National Energy Crisis Committee’s Plan.

He said Transnet, another failing entity, was sinking in its bid to manage its crumbling infrastructure, cutting export profit, and reducing tax to the fiscus.

In the previous financial year, Denel had a R747 million loss. Earlier this year, the entity indicated a technical profit of R390m before interest and tax for the year ending March 2023. Singh said the profit was not from operations but from National Treasury bailout money and funds from the Denel Medical Benefit Trust.

Singh said that since SAA was placed under business rescue in 2019, the government had allocated another R1bn to assist the carrier with its business rescue. SAA received R50.7bn in direct government funding from 2007 to 2022, of which R48.4bn was received in the past 10 years.

The South African Post Office (Sapo) is also under business rescue, with liabilities exceeding assets by a country mile. Sapo’s liabilities had reached R12.5bn, with only R4.5bn in assets. Singh said Sapo had contributed to South Africa’s mounting unemployment statistics.

The SABC lost R6.19bn in the past decade, and despite it receiving a taxpayer-funded bailout of R3.2bn in recent years, has yet again incurred a loss of R1.1bn in the 2022/2023 financial year.

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