To contextualise the contribution of unplanned support for state owned enterprises to fiscal expenditure slippage since the global financial crisis today’s post by Lisa Martin shows the magnitude of these support programmes relative to the overall government budget balance. Together with rising debt and State Owned Enterprises (SOE) bailouts have weighed on South Africa’s budget balance over the last decade.
The largest share of these bailouts went to Eskom, South Africa’s electricity utility. National Treasury treats Eskom debt relief ‘below the line’ which means that such spending is not included in the main budget, and is instead included on the balance sheet of government. This means today’s figure will not correspond to official budget balance calculations. But it serves to demonstrate the relative impact of SOE bailouts to borrowing requirements since 2010.
