Challenges faced by state owned entities and economic development in South Africa

Background: State Owned Enterprises (SOEs) play a vital role in government activities and the delivery of basic services to the people. The Government is active in the key sectors, such as, services, utilities, transportation and construction. Presumably, the distribution of basic resources and infrastructure development is to some extent dependent on SOEs. South Africa is inundated with challenges in SOE’s, such as, lack of service delivery, poor financial management, less growth, massive unemployment, corruption and low business confidence. These are a threat to economic and financial sustainability of a country. Twenty years into democracy, South Africa’s SOEs environment had many scandals in both private and public sectors. SOEs such as SABC, Eskom, and Transnet had their share of malpractice, fraud and corruption in management and at board level. These incidents call for interrogation at all levels as the impact undermines political, economic stability and growth prospects. One of today’s core challenges is to justify the existence of some of the SOEs in our economy. Looking at South Africa, most of the SOEs financial performances are severely deteriorating. Due to their financial constraints, they receive a bailout from government to enable them to continue to operate. Aim: This study identified specific governance challenges faced by SOEs and economic development in South Africa, over the period of 10 years (2014 - 2018). The study made recommendations to restore good governance in SOEs. Setting: This study reviewed articles and literature on the challenges faced by SOEs and economic development in South Africa. Primary sources for the document review took the form of newspapers, various official reports and ongoing records of SOEs activities, government departments, student transcripts, mission statements, annual reports, policy, manuals, student handbooks, and strategic plans, and press releases, theses from academic institutions, trade journals, business journals, government publications and business review publications. Secondary sources used were published books and journal articles.Thesis (MA) -- Faculty of Business and Economic Sciences , School of Economics, Development and Tourism, 202