South Africa: Privatisation of SOEs Is Not a Silver Bullet for South Africa

opinion

Privately owned and publicly traded firms have repeatedly demonstrated their inability to self-regulate, and their tendency towards greed, exacerbating the wealth gap that continues to distort the social framework and which continues to eradicate basic human values.

The recently released auditor-general of South Africa (AGSA) report on the 14 state-owned enterprises that are audited annually by the government - Eskom and Transnet are not currently audited by AGSA - makes for particularly chilling reading.

Three, including SAA, failed altogether to submit their financials, while the other 11 were all found to not be in compliance. The central themes across the SOE audits, and explicitly referenced in the consolidated national and provincial audit report, were procurement mismanagement and irregular wasteful expenditure.

These are terms that, to many, will be completely analogous with corruption. In essence, the conclusion that will be drawn is that the extent of irregularity in expenditure across the SOEs, which is measurable from the audit exclusions, will be a number that will estimate the low-water mark for the cost of corruption, and specifically State Capture.

The auditor-general report will further fuel the calls for privatisation of some, if not all, state-owned enterprises. As Nazmeera Moola argues in her...

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