InSouth Africa theDepartment of Public Enterprises is the shareholder representative of the South African Government[1] with oversight responsibility for state-owned enterprises in key sectors. Some companies are not directly controlled by the Department of Public Enterprises, but by various other departments. Further, not all state owned entities are registered as companies.
State-owned enterprises play a significant role in theSouth African economy. In key sectors such as electricity, transport (air, rail, freight, and pipelines), and telecommunications, SOEs play a lead role, often defined by law, although limited competition is allowed in some sectors (i.e., telecommunications and air). The government's interest in these sectors often competes with and discourages foreign investment.[2]
TheDepartment of Public Enterprises minister has publicly stated that South Africa's SOEs should advance economic transformation, industrialization and import substitution. DPE has oversight responsibility in full or in part for six of the approximately 700 SOEs that exist at the national, provincial, and local levels:Alexkor (diamonds),Denel (military equipment),Eskom (electricity generation),Transnet (railway transport and pipelines)South African Express,South African Forestry Company (SAFCOL) (forestry),South African Broadcasting Corporation. These seven SOEs employ approximately 105,000 people. The states share of the investment was 21% while private enterprise contributed 63% (government spending made up the remainder of 16%). The IMF estimates that the debt of the SOEs would add 13.5% to the overall national debt.[2]
Many state-owned firms were established during the apartheid era to counter the impact of international sanctions against the country.[3] The ANC government initially sold stakes in the companies, and lowered import tariffs. Those measures were reversed following opposition fromCOSATU and theSouth African Communist Party.[3] By 2007, an alliance of unions and leftist factions within the ANC had unseated PresidentThabo Mbeki, replacing him withJacob Zuma.[3] The new ANC policy aimed at expanding the role of SOEs in the economy, following the example of China.[3]
Although in 2015 and 2016, senior government leaders discussed allowing private-sector investment into some of the more than 700 state-owned enterprises and recently released a report of a presidential review commission on SOE, which called for nationalization of SOEs, no concrete action has been taken on the topic yet.[2]
By the end of the Zuma administration in 2018corruption within South African state owned enterprises by individuals connected to government such as the controversialGupta family had led to many enterprises facing deep financial difficulty.[4] Deepening financial issues, mismanagement, maladministration and government bailouts of enterprises such as theSouth African Broadcasting Corporation,[5][6][7]South African Airways,[8][9][10]Eskom,[11][12]Denel,[13][14]PRASA,[15] andTransnet caused increased public controversy. By the end of 2015–16 combined government guarantees on debts owed by state owned enterprises had reached R467 billion (equivalent to US$33.1 billion) and were expected to reach R500 billion by 2020 representing 10 percent of South Africa's GDP.[4] The situation at Eskom was regarded as so serious as to lead the South African business newspaperBusiness Day to speculate that it could cause a nationalbanking crisis.[12] In 2021 the South African Treasury reported that South African Airways had accumulated a total loss between 2008 and 2020 of R32 billion (US$ 2.1 billion) and received a total of R60 billion (US$ 4 billion) ingovernment guarantees.[16]
The Public Finance Management Act distinguishes between three types of public entities. Schedule 1 entities compromise Constitutional Institutions including theIndependent Electoral Commission andPublic Protector among others. Schedule 2 entities are listed as Major Public Entities and have greater autonomy than Schedule 3 entities. Schedule 2 entities are listed below. Schedule 3 entities are subdivided into:
| Name | Industry | Notes | Employees | Revenue | Profit/(Loss) | Ownership type | Established |
|---|---|---|---|---|---|---|---|
| Air Traffic and Navigation Services Company | Air Traffic Control | Manages air traffic and navigation within South Africa and part of the Southern Indian and Atlantic Oceans | R1.673bn[17] | R0.067bn | Fully state owned | 1993 | |
| Airports Company South Africa (ACSA) | Airport management | Owner and operator of major airports. | 3,110 | R2.86bn | R0.23bn | 74.6% state owned | 1993 |
| Alexkor | Mining | Diamond mining. | 859[18] | R0.2bn[18] | R0.03bn | Fully state owned | 1992 |
| Armscor (South Africa) | Armsprocurement | Arms procurement agency for theSANDF. | 1,467 | R1.75bn | R0.23bn | Fully state owned | 1968 |
| Broadband Infraco | Telecommunications | Long distance & international internet connectivity. | 166 | R0.41bn | (R0.01bn) | Fully state owned | 2007 |
| Central Energy Fund | Research & Development | Energy development. Parent company ofPetroSA. | 2,107 | R13.2bn | (R0.45bn) | Fully state owned | 1954 |
| Denel | Arms procurement | Armaments manufacturer. | 3,968 | R3.76bn | (R1.75bn) | Fully state owned | 1992 |
| Development Bank of Southern Africa | Banking | Funding for social andeconomic infrastructure. | 492 | R5.6bn | R3.1bn | Fully state owned | 1983 |
| Eskom | Public utility | Electrical production, transmission and distribution monopoly. | 46,665 | R179.8bn | (R20.7bn) | Fully state owned | 1923 |
| Independent Development Trust | Social Development | Supports education, housing, health services and business development projects (not profit-seeking) | 279 | R0.162bn | (R0.107bn) | Fully state owned | 1990 (reconfigured 1999) |
| Industrial Development Corporation of South Africa | Industrial Development | Shareholder in numerous companies and subsidiaries | R12.240bn | (R3.bn) | Fully state owned | 1940 | |
| Land and Agricultural Development Bank of South Africa | Agricultural Finance | Development finance for farmers | R5.032bn | (R2.124bn) | Fully state owned | 1912 | |
| South African Broadcasting Corporation | Broadcasting | South Africanpublic service broadcaster | 3,167 | R6.4bn | (R0.6bn) | Fully state owned | 1936 |
| South African Express | Transport | Regional airline | 980 | Fully state owned | 1994 | ||
| South African Forestry Company | Forestry | Manages forestry on state owned land | 2,363 | R0.93bn | (R0.08bn) | Fully state owned | 1992 |
| South African Nuclear Energy Corporation | Energy | Manages thePelindaba research reactor | 1,400 | R2.702bn | (0.131bn) | Fully state owned | 1999 (in current form) |
| South African Post Office | Postal services | National postal services | 18,119 | R4.5bn | (R0.9bn) | Fully state owned | 1991 |
| South African Airways | Transport | International airline | 10,071 | R30.7bn | (R5.4bn) | Fully state owned | 1934 |
| Telkom SA | Telecommunications | National telephone monopoly | 18,286 | R41bn | R4.9bn | 55.3% state owned[19] | 1991 |
| Trans-Caledon Tunnel Authority | Public utility | Water transport authority | 141 | R2.3bn | R2.1bn | Fully state owned | 1986 |
| Transnet | Transport | Railways, harbours, oil/fuel pipelines and terminals | 55,946 | R74bn | R6.04bn | Fully state owned | 1990 |
| Name | Industry | Notes | Employees | Revenue | Profit/(Loss) | Ownership type | Established |
|---|---|---|---|---|---|---|---|
| Council for Scientific and Industrial Research | Research & Development | National research organisation | 3,000 | R2.5bn | R0.007bn | Fully state owned | 1945 |
| Passenger Rail Agency of South Africa | Railways | Passenger railway services | 16,350 | R13.65bn | (R1.69bn) | Fully state owned | 1990 |
| PetroSA | Energy | National oil and gas company | 1,594 | R10.3bn | (R1.6bn) | Fully state owned | 1965 |
| PBMR | Research & Development | Development ofPebble Bed Modular Reactor nuclear energy technology | 900 | 1994 | |||
| Rand Water | Public utility | Water utility forGauteng province. | 3,411 | R13.4bn | R3.15bn | Fully state owned | 1903 |
| Sasol | Energy | Internationalcoal-liquefaction,petroleum refining and distribution. | 30,100 | US$21.7bn | US$3.11bn | 27.3% state owned (mostly indirectly through the government employees pension fund) | 1950 |
| Sentech | Telecommunications | Telecommunications infrastructure | 531 | R1.4bn | R0.18bn | Fully state owned | 1996 |
| South African National Parks | Nature conservation | Owner and operator of national parks. | 4,181 | R2.6bn | R0.2bn | Fully state owned | 1926 |
| South African National Roads Agency | Infrastructure | Maintenance and development of the national road network | 397 | R3,6bn | R1.01bn | Fully state owned | 1998 |
| Vodacom | Telecommunications | Cellular services | 7,554 | R86.4bn | R24.5bn | 13.9% state owned[19] | 1994 |
There are currently 108 State Owned Enterprises in South Africa[20]
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