Godongwana Reveals R520 Billion Taxpayer Pain To Bail Out Soes In Sa

The South African government spent R520 billion in taxpayer money to bail out struggling state-owned enterprises between 2008 and 2023, Finance Minister Enoch Godongwana has revealed.

Godongwana made the revelation at the launch of the World Banks Driving Inclusive Growth in South Africa : Quick Wins with Competitive Markets and Efficient Institutions report on Friday 28 February.

He admitted that the government used the wrong template in its bid to fix state power utility Eskom and the electricity sector.

We spent more time fixing the institution than fixing power to the grid. We therefore spent 16 years fixing the institution, Eskom, he explained.

A lot of bailouts with all its attendant consequences. In 2023, I asked my officials to check, between 2008 and 2023, how much have we spent bailing out institutions. R520 billion.

He added that the government didnt raise taxes for much of that period, so the money must have come from cutting expenditure in different areas.

Several SOEs have experienced corruption, mismanagement and financial difficulties over the years, including Eskom, Transnet, South African Broadcasting Corporation, South African Airways and SA Post Office.

The governments response was often to bail them out to keep them afloat. For instance, Eskom received R234 billion from the government between 2019 and 2024, according to a parliamentary reply by the late Public Enterprises Minister Pravin Gordhan.

Gordhan also revealed that the government spent R282.5 billion supporting SOEs between 2019 and 2023 - and received just R1 million in dividends in return. This came from the little-known South African Forestry Company SOC Limited.