The impact of underperforming state-owned enterprises on the South African economy
- Authors: Erasmus, Christopher
- Date: 2024-04
- Subjects: Government business enterprises , Government corporations , Budget deficits -- South Africa , Deficit financing -- South Africa
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10948/64951 , vital:73991
- Description: Problems have existed in South African SOEs for more than 80 years and in the more recent past, billions of rands in bailouts have begun to accumulate in an effort to revive struggling SOEs and consequently has placed the South African economy under immense fiscal strain. With the use of case study analysis, this study set out to determine the impact bailouts of underperforming SOEs are having on the budget deficit as well as government debt, with particular focus aimed at the contributions of Eskom and SAA. Thereafter, the study adopted a VAR framework and investigated if either the budget deficit or government debt share a relationship with economic growth based on data from 2000-2020. It was discovered that an alarming R331,206 billion has been given out in bailouts to underperforming SOEs over the past decade. As a result, SOEs have been identified by credit rating agencies, financial institutions such as the IMF and the National Treasury as posing one of the greatest threats to the fiscal outlook and a widening budget deficit. Results from the granger casualty tests only found evidence of unidirectional causality running from GDP to both the budget deficit and government debt, meaning there was no evidence to suggest that changes in the budget deficit and government debt influence GDP. The estimated VAR model also failed to find evidence of a statistically significant relationship existing between the budget deficit and GDP as well as government debt and GDP. These findings suggest that there is inconclusive evidence to suggest that underperforming SOEs do impact economic growth via the budget deficit and government debt. However, government expenditure was found to have a statistically significant and negative relationship with GDP which indicates that expenditure has been wasteful and is a reflection of the impact bailouts have on economic growth when considering the significant amount of expenditure directed towards SOEs over the past two decades. , Thesis (MCom) -- Faculty of Business and Economic Sciences, School of Economics, Development and Tourism, 2024
- Full Text:
- Date Issued: 2024-04
- Authors: Erasmus, Christopher
- Date: 2024-04
- Subjects: Government business enterprises , Government corporations , Budget deficits -- South Africa , Deficit financing -- South Africa
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10948/64951 , vital:73991
- Description: Problems have existed in South African SOEs for more than 80 years and in the more recent past, billions of rands in bailouts have begun to accumulate in an effort to revive struggling SOEs and consequently has placed the South African economy under immense fiscal strain. With the use of case study analysis, this study set out to determine the impact bailouts of underperforming SOEs are having on the budget deficit as well as government debt, with particular focus aimed at the contributions of Eskom and SAA. Thereafter, the study adopted a VAR framework and investigated if either the budget deficit or government debt share a relationship with economic growth based on data from 2000-2020. It was discovered that an alarming R331,206 billion has been given out in bailouts to underperforming SOEs over the past decade. As a result, SOEs have been identified by credit rating agencies, financial institutions such as the IMF and the National Treasury as posing one of the greatest threats to the fiscal outlook and a widening budget deficit. Results from the granger casualty tests only found evidence of unidirectional causality running from GDP to both the budget deficit and government debt, meaning there was no evidence to suggest that changes in the budget deficit and government debt influence GDP. The estimated VAR model also failed to find evidence of a statistically significant relationship existing between the budget deficit and GDP as well as government debt and GDP. These findings suggest that there is inconclusive evidence to suggest that underperforming SOEs do impact economic growth via the budget deficit and government debt. However, government expenditure was found to have a statistically significant and negative relationship with GDP which indicates that expenditure has been wasteful and is a reflection of the impact bailouts have on economic growth when considering the significant amount of expenditure directed towards SOEs over the past two decades. , Thesis (MCom) -- Faculty of Business and Economic Sciences, School of Economics, Development and Tourism, 2024
- Full Text:
- Date Issued: 2024-04
The audit committee’s role in preventing corporate governance failure within state owned enterprises
- Authors: Mbatha, Feziwe
- Date: 2018
- Subjects: Government business enterprises , Corporate governance -- South Africa , Audit committees -- South Africa
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: http://hdl.handle.net/10948/32311 , vital:32015
- Description: Widespread reports of the poor governance within the State-Owned Enterprises (SOEs) has proliferated the media in South Africa over recent years. This progressive decline of governance structures has raised varied concerns, most of which are expressed as questions of note. For example, questions exist about the reasons why laws, regulations and policies that aim to ensure effective corporate governance practices have largely been ignored. Secondly, questions exist about the identities of those employees / executives within these enterprises, who are responsible for ensuring that good corporate governance practices are maintained within an organisation. Similarly, there is need to clarify the role of the audit committees in upholding good corporate governance practices within SOEs? This study aims to identify, describe and clarify the role(s) of the audit committee in preventing corporate governance failures within SOEs. A qualitative research methodology was utilised as the basis for collating data to develop an in depth understanding of the audit committee’s oversight responsibility within SOEs. In-depth individual interviews (n=6) were conducted with board members as well as members of the audit committee of a specifically selected SOE that had a history of compromised corporate governance practices and suffered severe financial losses. From the interpretation of the collated data, it was noted that the presence of a strong audit committee enables a more accountable environment that requires senior management to account for their actions openly and transparently. SOEs need to appreciate corporate governance as an asset to a company’s operations rather than as a poorly rationalised compliance requirement.
- Full Text:
- Date Issued: 2018
The audit committee’s role in preventing corporate governance failure within state owned enterprises
- Authors: Mbatha, Feziwe
- Date: 2018
- Subjects: Government business enterprises , Corporate governance -- South Africa , Audit committees -- South Africa
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: http://hdl.handle.net/10948/32311 , vital:32015
- Description: Widespread reports of the poor governance within the State-Owned Enterprises (SOEs) has proliferated the media in South Africa over recent years. This progressive decline of governance structures has raised varied concerns, most of which are expressed as questions of note. For example, questions exist about the reasons why laws, regulations and policies that aim to ensure effective corporate governance practices have largely been ignored. Secondly, questions exist about the identities of those employees / executives within these enterprises, who are responsible for ensuring that good corporate governance practices are maintained within an organisation. Similarly, there is need to clarify the role of the audit committees in upholding good corporate governance practices within SOEs? This study aims to identify, describe and clarify the role(s) of the audit committee in preventing corporate governance failures within SOEs. A qualitative research methodology was utilised as the basis for collating data to develop an in depth understanding of the audit committee’s oversight responsibility within SOEs. In-depth individual interviews (n=6) were conducted with board members as well as members of the audit committee of a specifically selected SOE that had a history of compromised corporate governance practices and suffered severe financial losses. From the interpretation of the collated data, it was noted that the presence of a strong audit committee enables a more accountable environment that requires senior management to account for their actions openly and transparently. SOEs need to appreciate corporate governance as an asset to a company’s operations rather than as a poorly rationalised compliance requirement.
- Full Text:
- Date Issued: 2018
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