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SA sweats on investor reaction to resignations of SAA, Eskom CEOs

Economists said that Public Enterprises Minister Pravin Gordhan must answer why the trust levels around the turn around strategies for SOE's are diminishing.

FILE: JB Magwaza,  South African Airways board chairperson, appears before Parliament on 27 March 2018. Picture: Lindsay Dentlinger/EWN

JOHANNESBURG - Questions are being raised about how investors will react after the resignations of the CEO's of both SAA and Eskom.

SAA CEO Vuyani Jarana tendered his resignation on Wednesday, less than a week after Eskom CEO Phakamani Hadebe called it quits.

SAA has not made a profit since 2011 and has since been surviving on state guarantees.

The two SOE's have a combined debt bill of close to R500 billion.

Seven months ago, Finance Minister Tito Mboweni sent a message to the international community at an investment conference in New York, saying that if the country wanted a national carrier, it needed to start afresh.

Economist Xhanti Payi said that with two CEO's leaving less than a week apart, it sent a worrying message to international investors.

Meanwhile, economist Iraj Abedian said that political leaders needed to make drastic changes if they want to see different outcomes.

"It's quite clear that both Eskom and SAA CEO resignations are going to put a big dent in President Ramaphosa's promises, locally and globally."

Economists said that Public Enterprises Minister Pravin Gordhan must answer why the trust levels around the turn around strategies for SOE's are diminishing.

Gordhan has not yet responded to any media questions about Jarana's resignation.

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