South African heritage site lost R1.5 billion and is hopelessly insolvent

Freedom Park is one of South Africa’s best-known heritage sites, but over the past five years, it has incurred losses totalling R1.49 billion and is hopelessly insolvent.

Freedom Park is situated in Salvokop in Pretoria and includes a memorial with a list of the names of those killed in the South African Wars, World War I, World War II, as well as during the Apartheid era.

The park is an agency of the Department of Sport, Arts and Culture. It describes itself as a cultural institution housing a museum and a memorial dedicated to chronicling and honouring the many who contributed to South Africa’s liberation.

The museum aims to preserve and narrate the story of the African continent, specifically South Africa.

The company says it covers this narrative from the dawn of humanity, through pre-colonial, colonial and Apartheid history and heritage, to the post-Apartheid nation of today. “It is a long walk, spanning some 3.6 billion years,” it says.

“It is a centre of knowledge aimed at deepening the understanding of the nation. It strives to accommodate all of the country’s experiences and symbols to tell one coherent story.”

Its vision is to be a leading national and international icon of humanity and freedom.

Its mission is to provide a pioneering and empowering heritage destination that challenges visitors to reflect on South Africa’s past, improve the country’s present, and build on its future as a united nation.

The 52-hectare site offers visitors a range of experiences that reflect the country’s rich history and cultural diversity.

This includes the main S’khumbuto memorial, which features nearly 200 ascending metal reeds symbolising the country’s rebirth. 

This memorial houses the Wall of Names, an amphitheatre, an eternal flame, and the Gallery of Leaders, which honours individuals who significantly influenced South Africa’s history.

Financial decline

Despite its significance, Freedom Park’s financial performance has declined dramatically in recent years. Between 2019/20 and 2023/24, it recorded cumulative losses (deficits) of R1.5 billion.

This is largely due to a simple reason—its expenditures far outpace its revenue. In 2023/24, the park made a total revenue of R136.78 million, but its total expenditures were more than double that amount, at R394.30 million.

It is important to note that heritage sites take a lot of money to run, as maintenance costs are typically extremely high.

However, R1.5 billion in losses in just five years is a significant drain on the fiscus in a country that is already running year-on-year deficits.

In addition to its significant deficits, Freedom Park has also struggled over the past two years to obtain an unqualified audit opinion.

From 2019/20 to 2021/22, the heritage site received a financial unqualified audit outcome.

However, for the next two years, it received a qualified audit outcome, meaning an auditor reviewed the organisation’s financial statements and found that, while most of the information is correct, there are some issues or limitations.

While this is not as serious as an adverse opinion, it does indicate problems that need fixing.

Freedom Park outlined its biggest challenges in its latest annual report for the financial year 2023/24.

This included budget cuts, with the park’s budget having been slashed by 24%, which it said hindered the implementation of strategic projects.

It also highlighted a major financial liability of R5.4 billion, which created insolvency issues and prompted discussions with the Minister of Public Works.

It also acknowledged the qualified audit opinion it received but said improvements were made.

Positively, the park said it achieved a 100% reduction in irregular expenditure, from R48,000 in 2022/23 to zero in 2023/24.

However, the park’s solvency is in trouble, as its net assets have been in the red for at least the past five years.

For the 2023/24 financial year, the park recorded negative net assets of R4.92 billion.

Freedom Park’s financial performance over the past five years can be seen in the graphs below.

Freedom Park