Engaging the debate on privatization in South Africa: Theories, fables, facts, others

The Government of South Africa apparently is clear about its goals for the reform of public enterprises. In his 2001 Budget Speech (RSA, 2001a, p.1), the Minister of Public Enterprises explains ?restructuring? as the generic term taken to represent the set of strategies employed by the state to ensure that public enterprises in South Africa are efficient, effective, and powerful engines of socio-economic development.Restructuring aims to maximize the contribution that these state assets can make to de- velopment through the integration of public, private and social capital and expertise.

The post-apartheid government of South Africa inherited over 300 state- owned enterprises [SOEs], with four of the firms accounting for 86 percent of aggregate turnover, 94 percent of total income, 77 percent of all employment, and 91 percent of the total assets of these enterprises. These key enterprises, as they are collectively described in the Government's Policy Framework Paper, are in telecommunications (Telkom), energy (Eskom), transportation (Transnet), and defense (Denel). None of these firms are slated for outright privatization in the near future. The debate is joined around the wisdom of the Government?s model of reform, its so called matrix of options.