State-owned South African Airways.
State-owned South African Airways.
  • Government plans to sell non-core assets to provide additional funding for SOEs. 
  • This might include selling business units at SOEs, a treasury deputy general director said.
  • During his budget speech, finance Minister Tito Mboweni said South Africa should ask itself if it still needs SOEs. 

Additional support for State Owned Enterprises (SOEs) will be provided by selling non-core assets, the 2019 budget, released on Wednesday, reads.

In a strongly-worded budget speech, finance minister Tito Mboweni said SOEs place severe pressure on the country’s budget. 

He said the national treasury has received funding requests from SAA, SABC, Denel and Eskom. 

“Isn’t it about time the country asks the question: do we still need these enterprises? If we do, can we manage them better? If we don’t need them, what should we do,” Mboweni asked. 

In line with president Cyril Ramaphosa’s State of the Nation Address (SONA), Mboweni said strategic equity partners will be found to fund SOEs. 

In a press briefing before the budget speech, he asked why government would spend money on failing SOEs when finances are desperately needed to build roads. 

Also read: This is what will happen to your cellphone signal if load shedding drags on

National treasury public finance deputy director general Mampho Modise said selling assets can include selling business units at SOEs to cover debt. 

Both Eskom and SAA recently announced plans to split their operations into three distinct business units. 

“Several proposals are currently being considered. I cannot provide details at this time,” Modise told Business Insider South Africa at the sidelines of the budget speech. 

During his budget speech, Mboweni said the state is considering a proposal to end the issuing of guarantees for operational purposes for SOEs. 

Contingency reserve was reserved upwards by R6 billion in the 2019 budget to respond to possible funding requests, Mboweni said. 

For more, go to Business Insider South Africa.

Receive a single WhatsApp every morning with all our latest news: click here.

Also from Business Insider South Africa: