SONA 2022: No mention of SOE bailouts in Cyril Ramaphosa’s address

President Cyril Ramaphosa on Thursday night made no mention of any bailouts of struggling state-owned entities.

Unlike in previous addresses, Ramaphosa steered clear of any talks of a bailout, focusing mainly on reforms and agricultural initiatives, and corruption.

In previous years, the government has poured billions into SOEs like SAA, Denel, and Eskom to help turn around the struggling state-owned companies. But this won’t be the case this year.

In his 2021 address, Ramaphosa said a centralised model would be implemented, which would standardise governance and financial management of all SOEs.

On Thursday night, Ramaphosa instead focused his attention on Eskom and the ongoing electricity crisis.

He said this was holding the country back and was having an adverse effect on South Africa’s economy.

But in 2020 former Finance Minister Tito Mboweni warned about bailing out underperforming SOEs, saying the country had spent nearly R200 billion bailing out SOEs.

Ramaphosa said the solution was renewable energy production, which would make electricity more available and make the companies globally competitive.

-EWN

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