Tag: State-Owned Enterprises (SOEs)

The cabinet approved a new state-owned enterprise (SOE) plan, which will lays the basis for private equity investment in state companies and listings on the stock exchange. It has already stirred significant debate and discussion – and rightly so, because full or partial privatisation by countries around the world has been met with mixed success.

The 2020 Budget was tabled to Parliament on 26 February 2020 by South African Finance Minister Tito Mboweni.

Finance Minister Tito Mboweni delivered a macabre Medium-Term Budget Policy Statement (MTBSP) to Parliament on October 30. The MTBPS communicates to government and the people the economic context of the country and fiscal spending priorities over the coming three years. (It does not include detailed spending plans or tax proposals, which are left to the main budget in February.)

The stakes have never been higher, and despite Minister Tito Mboweni’s always-jovial presence in parliament as he tabled Budget 2019, his words prepared us for the bitter medicine that must be swallowed before we can experience economic recovery.

In the 2019 State of the Nation Address, our President set out an ambitious agenda for our nation. It is an agenda that speaks to the South Africa that we can be. It is a task list for all of us. It lays out a series of interventions that will put South Africa on a bold new path.

All eyes are on newly appointed Finance Minister Tito Mboweni’s first Medium Term Budget Policy Statement (MTBPS), scheduled to be delivered to Parliament on 24 October. Just two weeks into his tenure, Minister Mboweni will face the task of affirming government’s commitment to fiscal consolidation and strategic investment in the face of low economic growth.

South Africa’s economic future is inextricably linked to the broader efforts to create a cohesive and progressive society. Initiatives to stimulate key sectors of the economy and attract investment to ignite job-creating growth will not be successful if they are not accompanied by a parallel process to address lingering issues in society that inhibit nation building.

President Cyril Ramaphosa’s late night announcement on 31 July 2018 on the decision to amend Section 25 of the South African Constitution to clearly articulate land without compensation has driven the debate on land ownership into top gear. 

Nationalisation of property, inefficient State-owned enterprises, raising the legal drinking age from 18 to 21, and higher taxes in a low-growth environment. These ideas have all been tried elsewhere. And they have failed consistently, with few exceptions.

As State Owned Enterprises (SOEs) continue to struggle under severe financial pressure, perhaps it is time for them to consider business rescue to alleviate continued financial distress and to avoid potential personal liability of directors who continue to run these companies and rely on the inevitable call up of a government guarantee.