Do not expect word on state’s funding plans for SOEs before end-October
Finance minister Nhlanhla Nene says the state-owned company sector represents a major risk to the fiscal framework, and reforms are required
Details of government support for state-owned enterprises (SOEs) will only be forthcoming in the medium-term budget policy statement to be tabled in parliament on October 24 but the aim is to keep such support deficit neutral, finance minister Nhlanhla Nene said on Monday. A number of loss-making SOEs such as SAA, SA Express and Denel are in dire need of an injection of funds and have appealed for government assistance. SAA has indicated that it needs R21.7bn over the next three years to turn the company around and make it profitable. SA Express says it needs R1.74bn, while the figure for Denel, which has experienced serious liquidity challenges, is about R3bn. The distressed state of SOEs has been flagged by credit ratings agencies as one of the risks to the fiscus that could hamper an improvement in SA’s sovereign rating. Public enterprises minister Pravin Gordhan has taken steps to bolster governance and management at SOEs by appointing new boards of directors as well as new exec...
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