A professor at the University of Western Cape School of Governance, Patrick Bond says current economic conditions will require new strategies for struggling State Owned Entities (SOEs).
SOEs such as Transnet and South African Airways have historically relied on import markets and travel and tourism for profits.
Bond says SOEs that are dependent on imports and travel will need to reimagine new ways of doing business that is less elitist and more inclusive.
“What we know from Finance Minister Tito Mboweni’s prior statement is that he really does not like the subsidisation of state-owned enterprises no matter what they’re for – whether they’re in the social interest or the interest of the elites. He doesn’t want to see loss-making SOEs. And maybe the restructuring of this economy. And if President Ramaphosa speech last night is to be believed, we need a fair and just economy. Maybe it would mean taking the SOEs and putting them back together in the public interest with ecological sensibilities rather than the elite-driven and high pollution system that we’ve inherited.”
The economic impact of the virus has hit businesses and individuals hard, with many people being left without jobs since the start of the national lockdown.
Addressing the nation on Tuesday night, President Ramaphosa said South Africa is set to forge a new economy in a new global reality after the coronavirus pandemic settles. He announced a R500 billion support package for the economy.
Some of the money will, in the first instance, be used to assist in the health response, including ventilators and hospital beds. Another part of the money will include the reprioritisation of R130 billion from the current budget.
In this video, President Cyril Ramaphosa addresses the nation on Tuesday: