State-owned enterprises urged to generate more revenue
Moody’s has urged parastatals to be self-sufficient, stand on their own two feet and consolidate.
JOHANNESBURG - Ratings agency Moody's has warned parastatals they need to generate more revenue and finally become independent.
However in its latest report, Moody's says the credit outlook for South Africa remains stable.
It's also applauded government's commitment to containing debt and efforts to curb state expenditure.
Moody's has urged state-owned enterprises to be self-sufficient and consolidate.
This includes power utility Eskom and the South African National Roads Agency Limited (Sanral).
Eskom stated this week that it had made a profit of around R50 billion but still needed to borrow another R20 billion to keep the lights on.
Moody's says parastatals need to stand on their own two feet.
It also says wages are taking their toll on state spending and government needs to make cuts elsewhere when paying for public service increases this year.
South Africa is rated at BAA2, two levels above junk status.