The Permanent Secretary in the Ministry of Finance, Mr Gape Kaboyakgosi, said this during the Youth Budget Pitso held in Selebi Phikwe on Tuesday. 

The event, aimed at engaging the youth in discussions about the national budget, amongst other matters, was officiated by Vice President Mr Ndaba Gaolathe, who is also the Minister of Finance.

Mr Kaboyakgosi articulated that the primary objective of the review and possible merging of underperforming SOEs was to alleviate fiscal pressure on government and to significantly enhance the operational efficiency of those enterprises.

He highlighted that many SOEs were currently not meeting expected performance benchmarks, which not only affected their viability but also constricted government’s ability to invest in vital public services and initiatives.

Mr Kaboyakgosi pointed out that the inefficiencies in the underperforming SOEs had a direct and detrimental impact on government’s drive to foster youth economic empowerment. 

He underscored that the misallocation of public resources, stemming from those inefficiencies, limited the available funds that could otherwise support competing national priorities, particularly those focused on job creation and entrepreneurial support for young people. “Government is committed to conducting a detailed review of specific SOE portfolios. This effort aims to identify and address the critical challenges that hinder government’s capacity to finance essential development programmes,” he said.

He said the programmes were pivotal, especially those designed to generate employment opportunities and to assist youth in launching their own sustainable businesses.

Mr Kaboyakgosi explained that reforming SOEs should not be viewed solely as a governance issue. Instead, it should be recognised as a critical economic drive.  He argued that such reforms have the potential to significantly influence the entities to transform into powerful drivers of economic growth and job creation, and that without those necessary changes, some SOEs might continue to pose long-term risks to public finances, which could undermine economic stability and development

Public Enterprises Evaluation and Privatisation Agency (PEEPA), acting chief executive officer Mr Ismael Joseph said the challenges presented fiscal risks, particularly in cases where those enterprises failed to deliver satisfactory returns on public investments.

Considering the concerns, Mr Joseph elaborated on the need for review policy, which aims to tackle several critical issues affecting SOEs. 

Those include outdated business models that hindered competitiveness, a lack of innovation that stifles growth and overlapping mandates that created confusion and inefficiency within sectors.  Furthermore, he said governance challenges were prevalent, often leading to a lack of accountability and ineffective management. ENDS