Hope Fades in South Africa

Bailouts aren’t the solution for the problems of state-owned companies.

Xander Snyder |August 23, 2018

When South Africa’s new president, Cyril Ramaphosa, was sworn into office in February, there was hope that he would open a new chapter in South African politics and address some of the country’s structural economic problems. But that hope is beginning to fade.

The government is reportedly considering providing a bailout worth 59 billion rand ($4.1 billion) to several South African state-owned enterprises, in addition to another proposed assistance program worth 43 billion rand. Unsurprisingly, this has raised concerns about the government’s financial position. Several SOEs, including the South African National Roads Agency, Eskom (an energy company that provides 90 percent of the country’s power) and South African Airways, have been struggling financially for years. The South African Post Office, which has recently taken over responsibility from the South Africa Social Security Agency for disbursing social security payments to 17 million citizens, may also need government a

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