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Opposition parties call on Mboweni to give clear direction on struggling SOEs

The Finance Minister’s budget focused mainly on COVID-19 spending and servicing South Africa’s mounting debt.

Finance Minister Tito Mboweni delivering his Supplementary Budget on 24 June 2020. Picture: GCIS

CAPE TOWN - Political parties on Wednesday called for a clear direction on struggling state-owned enterprises (SOEs).

Some of them criticised Finance Minister Tito Mboweni’s supplementary budget for failing to set out concrete steps on the failing entities.

Mboweni’s budget focused mainly on COVID-19 spending and servicing South Africa’s mounting debt.

FULL TEXT: Mboweni’s Supplementary Budget Speech

The Democratic Alliance (DA) said that the speech was more of a horror story on the state of the country’s public financing.

The DA MP and spokesperson on finance, Geordin Hill-Lewis, said that warnings by Mboweni about a sovereign debt crisis were correct as this could not be ruled out.

“Minister Mboweni set out two scenarios: a passive (‘the wide gate’) and an active (‘the narrow gate’). On the passive path, government debt-to-GDP will soar to 140% by 2028, all but guaranteeing a debt crisis. On the active path, debt will stabilise at 87% and begin a slow decline,” Hill-Lewis said in a statement.

“In short, if the government does not implement far-ranging economic reform now, the economic crisis will be far worse than previously thought.

“But this government has made no progress on fundamental reform to date,” he added.

The Inkatha Freedom Party (IFP) MP and spokesperson on finance and public enterprises, Inkosi Mzamo Buthelezi, said that his party expected the finance minister to touch on burning issues like funding for South African Airways (SAA).

“The IFP believes that there is no other alternative but to phase out the control of the state, in terms of partially privatising SOEs and implement stricter measures in which we are to appoint the best of what we have to offer in skills, expertise, and knowledge in running effective, efficient, and profit-making SOEs,” Buthelezi said in a statement.

The Economic Freedom Fighters (EFF) stated that the speech was uninspiring and offered little to no practical plans to fight COVID-19.

“Privatisation and looting of SOEs are in full swing, and the governing party is finishing off what the apartheid government started. The fact that there was no mention of SA Express workers who have not been paid their March salaries is a clear indication of the callous agenda,” the party said in a statement.

WATCH: SA’s debt, unemployment & other points from Mboweni's zero-based Budget

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