THE trend worldwide is for wealthier countries to have large governments. South Africa has a government larger than expected and still growing steadily. The international trend for poorer countries is to have many SOEs, and government investment a larger fraction of the total.
South Africa has more SOEs and government investment than is normal for a country at our level of development. A recent assessment reported no fewer than 717 state-owned enterprises (SOEs) in South Africa with total assets of R1trn, or 27% of GDP, and government investment amounting to more than 30% of our total investment.
As can be seen from South Africa’s Tax Freedom Day* which this year fell on May 25, same as last year but six weeks later than in 1994 and a full two months later than 1972, SOEs are a substantial burden on the taxpayer and economy.