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IMF staff to SA govt: Cut irrelevant, underperforming SOEs

The South African government should take a full inventory of state-owned enterprises (SOEs) and divest or liquidate those that are no longer relevant – or which are failing to meet their objectives.

This is according to preliminary findings by staff of the International Monetary Fund (IMF) who consulted virtually with government, the SA Reserve Bank, Eskom, business, organised labour and academia in November.

The Washington, DC-based lender also said any support to SOEs should be made on condition that concrete and measurable actions are rolled out to improve their performance and viability.

According to IMF staff, there has been little progress in the SA government's implementation of structural reforms at SOEs, leaving continued weaknesses.

"SOEs carrying out predominantly government business should have their functions merged into a related government department or an agency," the preliminary report suggests.

The IMF staff consultations form part of the IMF's surveillance function. The report stresses, however, that the preliminary views of the IMF staff do not necessarily represent the views of the IMF's executive board.  

The consultations aim to conduct economic and financial assessments of government policies and give policy recommendations. Discussions focused on policy measures and reforms needed to create a lasting, job-creating, inclusive, and green recovery for SA's economy.

A final report will be submitted to the IMF board in February next year.

In response to the IMF staff's preliminary findings, National Treasury said in a statement on Wednesday that, in general, it believes the concerns highlighted in the report are aligned with government's response programme to stimulate economic growth.

It said work is also advancing on reforms including the restructuring of Eskom; streamlining water-use licence applications and preparing to establish a a National Water Resources Infrastructure Agency; developing an e-visa system to be rolled out in 2022; resolving issues blocking the release of high demand spectrum and making affordable data available; reviewing laws governing skilled migration; accelerating infrastructure investment projects; and transitioning to a low-carbon economy.-fin24

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Last modified on Thursday, 09 December 2021 17:41

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