South Africa

Government pumped R233.6 billion into SOEs – and only got R1 million back

Pravin Gordhan

Public Enterprises Minister Pravin Gordhan revealed that the government had provided R233.6 billion in bailouts for state-owned enterprises (SOEs) over the last five years and only received R1 million in dividends.

Gordhan responded to parliamentary questions about bailouts to state-owned enterprises and the dividends these enterprises have paid to the government.

The DA’s Farhat Essack asked Gordhan how much the government had paid in bailouts to Alexkor, Denel, Eskom, SA Forestry Company Limited (Safcol), SA Airways and Transnet over five years.

He also asked the Public Enterprises Minister what total amount these state-owned enterprises paid in dividends to the government over the past five years.

Gordhan said Eskom received R181.6 in bailouts, Denel received R9 billion, SAA received R37 billion, and Transnet received R5.8 billion. There were no bailouts for Safcol or Alexkor.

The only company which paid dividends to the government was Safcol, which declared a R1 million dividend at its 2021/22 AGM.

Simply put, the government invested R233.6 billion into the group of SOEs and received a R1 million return on it to date.

This means the government made a total return of -99.99957% on its investment, losing virtually everything it invested.

The table below provides an overview of bailouts received and the dividends paid by the five large state-owned enterprises.

State-owned enterpriseBailoutsDividends
EskomR181.6 billionR0
DenelR9.0 billionR0
SafcolR0R1 million
SAAR37.1 billionR0.00
TransnetR5.8 billionR0.00
AlexkorR0.00R0.00
TotalR233.6 billionR1 million

Government bailouts

The new data followed shortly after news that the South African government has spent R331 billion on bailouts for SOEs since 2013/2014, of which Eskom accounted for 55%.

This data was revealed in a presentation to the Standing Committee on Public Accounts on SOE bailouts and government guarantees.

The presentation showed that the government had spent R331 billion in bailouts of Eskom, SAA, Sanral, Sasria, the Land Bank, the SAPO, and Denel.

These bailouts, called recapitalisations, were granted to implement turnaround plans, repay debt and government guarantees, improve liquidity, and for capital expenditure.

The bailouts increased from R2.9 billion in 2014 to R65 billion in 2023, illustrating the deteriorating state of these organisations.

Despite large bailouts, SOEs like Eskom, the SAPO, and Denel are now in a much worse state than ten years ago.

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