Government runs out of money

Pay insecurity is on the rise amongst state-owned enterprises and municipalities as it seems the government is running out of money.

A recent Business Tech article illustrates this, listing the likes of Denel, Metrorail, Prasa and the SABC as not having paid staff on time.

Municipalities in trouble

• 30 municipalities in the country have not paid employees due to lack of funds
• Employees at the Amahlati municipality in the Eastern Cape were last paid in April
• The latest report from the auditor general showed a shocking decline in the state of the country’s municipalities over the last year
• 257 municipalities and 21 municipal entities were audited for the 2017-18 financial year
• 63 municipalities regressed
• 22 improved improved
• Only 18 municipalities obtained a clean audit by producing quality financial statements and performance reports, as well as complying with all key legislation

Big bailouts

A large portion of South Africa’s state companies are currently heavily reliant on the state for bailouts.

• The SABC is currently waiting on government approval of a R3.2-billion bailout
• Eskom has a R69-billion guaranteed pledge from the government coming in over the next three years
• SAA needed over R21-billion from government to fully implement its turnaround strategy, but had to turn to private funding after the government could not meet its needs.