All South African SOEs must fulfil development mandate, says president

Source: Xinhua| 2020-02-14 11:20:49|Editor: zyl
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CAPE TOWN, Feb. 13 (Xinhua) -- The South African government is working to ensure that all state-owned enterprises (SOEs) fulfil their development mandate and are financially sustainable, President Cyril Ramaphosa said on Thursday evening.

"In consultation with the Presidential SOE Council, we will undertake a process of rationalisation of our state-owned enterprises and ensure that they serve strategic economic or developmental purposes," Ramaphosa said in his state of the nation address.

A number of SOEs in the country have suffered from state capture, corruption and mismanagement for years, the president said.

The extent of state capture, corruption and mismanagement in SOEs is best demonstrated at South Africans Airways (SAA), Ramaphosa said.

Due to significant financial losses, the national flag carrier was placed in business rescue in December.

"The business rescue practitioners are expected to unveil their plans for restructuring the airline in the next few weeks," said Ramaphosa.

In the interests of South Africa's aviation industry and the economy, it is essential that a future restructured airline is commercially and operationally sustainable and is not dependent on further government funding, he said.

In addition to SAA, several other SOEs are in distress, and the country's public finances are under severe pressure, Ramaphosa said.

"It is you, the people of South Africa, who carry this burden, confronted by rising living costs, unable to escape poverty, unable to realize your potential," he said.

"This year, we are moving from the stabilization of state-owned enterprises to repurposing these strategic companies to support growth and development," Ramaphosa said.

South Africa is facing a stark reality as the economy has not grown at any meaningful rate for over a decade, according to the president.

Even as jobs are being created, the rate of unemployment is deepening, Ramaphosa said, vowing to build a capable state and place his country's economy on the path to recovery.