South Africa giving billions to struggling state-owned firms

JOHANNESBURG (AP) — South Africa announced an additional USD3.5 billion in government spending for struggling state-owned power utility Eskom and national carrier South African Airways (SAA) over the next three years as the country’s weak economy faces an electricity crisis.

Finance Minister Tito Mboweni also announced an additional USD15 billion over the next 10 years for restructuring the energy sector.

South Africa relies heavily on coal for power production but must explore other options as aging plants falter.

Mboweni’s national budget address was largely bleak. South Africa’s economy is expected to grow by only 0.9 per cent this year and unemployment is the highest in a decade at 29 per cent.

The power crisis is having a negative impact on the economy, the minister said. South Africa continues to experience widespread and frequent power cuts.

“Government will do whatever it takes to ensure a stable electricity supply. As I said, it is our number one task,” Mboweni told Parliament. His speech faced criticism from opposition parties over the continued bailout of state-owned companies.