Government-owned firms are often branded as uncompetitive, stuck in the past and unable to truly innovate. But they’re sometimes better suited than private firms to drive new, clean technologies.
Eskom and Iscor were formed to feed the railway network’s need for cheap electricity and steel.
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Though formed by the state, Eskom and Iscor enjoyed very little state support in their infancy. To survive, they had to cooperate with the private sector companies they were meant to compete with.
South Africa’s Finance Minister Tito Mboweni must walk a fiscal tightrope.
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It would be better to proactively restructure South Africa’s electricity sector to spur innovation and investment and reduce costs before another crisis hits and further derails the economy.
Electricity pylons from Cape Town’s Koeberg nuclear power plant. State-owned companies help to provide infrastructure for economic development.
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State-owned companies are not generally needed to provide goods. Rather, they are needed to provide the foundation for a well-functioning economy and a healthy, well-informed populace.