When Finance Minister Tito Mboweni delivers the Budget Speech on Wednesday, South Africans are likely to get a better idea of the state of the economy. But in the midst of an aggressive load shedding schedule and talks of unbundling Eskom a more pressing question for the minister this year might be: What’s the way forward for state-owned enterprises?
“The SOE’s in SA have been cause of concern on two fronts,” says Craig Polkinghorne, Head of Commercial Banking at Standard Bank. Firstly, because they’ve been easy targets for corruption and secondly because they are critical to the economy and essential for economic growth.
South Africa needs cost containment in public sector expenditure because the way in which expenditure ballooned out of control wasn’t a healthy way of driving economic growth, according to Craig. “We’re seeing this in the way government is tackling SOE’s to make them more economically viable,” he says. However, the forecast at Standard Bank is that the economic growth rate for 2019 will still be relatively stagnant between 0.5% and 1%.
In the lead-up to the Budget 2019, Craig joined senior financial journalist Lameez Omarjee to discuss SOE’s as well as how South Africa can achieve faster and more equitable growth in the year ahead. Hear more of his thoughts on the upcoming Budget Speech in the podcast below:
This post is sponsored by Standard Bank produced by BrandStudio24 for Fin24.