Speaking at the World Economic Forum (WEF) in Davos, South Africa’s Finance Minister Tito Mboweni highlighted three critical turnaround developments that must take place to ensure a conducive business environment.
These include: Government’s reform agenda must gather momentum; policy certainty needs to be secured; and investment needs to recover at a fast pace.
“We do not have a choice but to remain steadfast in implementing operational and governance reforms in all the SOEs. The pressures and risks that SOEs, particularly Eskom, pose to the South African economy, cannot be overstated,” Mboweni said.
He added: “We will continue to provide medium-term support to Eskom to secure energy supply and to honour the state’s contractual obligations. We remain committed to the separation of Eskom into three functions (generation, transmission, distribution) in conjunction with necessary organisational reforms to achieve operational efficiency.
“The immediate priority has been to stabilise Eskom’s cash-flow management while undertaking the separation. Government has made provisional support of R49 billion available in 2019/20, R56 billion in 2020/21 and R33 billion in 2021/22.”
He further noted: “National Treasury, in partnership with the Department of Public Enterprises, has instituted a series of measures to bring discipline to the utility’s finances, and to step up the timeline for restructuring.”
Read Finance Minister Tito Mboweni full speech here.
Commenting on the state of South Africa’s affairs, a few scathing comments were made by CNN’s Richard Quest during an interview at Davos, directed at the credibility, or lack thereof, of the South African government’s policies and reforms.
According to Quest, the country has little credibility “following the Zuma years and the capture of the state-owned enterprise”.
Emphasising that the opportunities are “huge”, South Africa remains tainted by the years of corruption.
WATCH: The Money Show’s Bruce Whitfield interviews CNN’s Richard Quest at the 2020 World Economic Forum in Davos.
In his concluding remarks, Mboweni stressed: “It is only through the implementation of the needed reforms that we can benefit from the advantages presented by our country, such as the young labour market, world-class infrastructure and a sophisticated financial market.
“Achieving an inclusive, job-creating and sustainable economy will not be possible without the reforms. I will expand on the status of the reforms when I present the Budget in February.
“As members of Team South Africa, we look upon you to partner, support, invest and collaborate with Government to ensure that domestically, we are all stakeholders for an inclusive and sustainable economy.”