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South African economy on the brink of collapse, to become as bad as Zimbabwe


THE main aim for state-owned enterprises (SOEs) is to assist the government to achieve economic growth and service delivery, but also to reduce a country’s tax burden. But for South Africa, this is not the case. SOEs are increasing the country’s tax burden and doing nothing for economic growth.


A state-owned enterprise is a business enterprise where the state has significant control through full or majority ownership. SOEs were formulated to boost the country's economic growth and development.

Almost every week, there’s has been a crisis regarding government entities; the country’s health system, protection services and municipalities. They are all in disintegration from what they are supposed to be.

From indebted municipalities to Eskom being in shambles and SABC being bankrupt, South Africa is falling apart and many fear it will soon be as bad as the neighbouring Zimbabwe.


Political analyst, Ralph Mathekga, says that corruption is the main reason for all of these social problems and ongoing investigations that are happening in the country.

“The state capture, VBS saga and numerous SOE bail outs are just a tip of the iceberg, which will eventually sink the country. The reason we find ourselves in this mess is because of high levels of corruption in our government, from Members of Parliament (MPs) to the traffic officers,” Ralph says. Another political analyst, Anthony Butler, says, “Eskom and other SOEs pay very high salaries and they have hired tens of thousands of new employees, often at general management level.” In the same breath, Ralph says it’s not too late for a turnaround strategy.

The government has to iron out corruption from every level in its structure and make sure the corruption doesn’t have a place in our society.


According to the analysts, the sad side of the tale is that taxpayers’ money is used to bail out the SOEs every time they need funding. Meanwhile, the same taxpayers are not provided with proper services.

“Poor South Africans are the ones who are most affected. With the high petrol prices, food prices are constantly on a rise, how do we expect poor South Africans to make a living and sustain themselves? Take into consideration that when the government taxes most of the things, like food, ordinary South Africans suffer the most, yet the same funds they take from the poor people are misused by the very same government anyway,” says Anthony.

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