Africa-Press – South-Africa. South Africa’s government guarantees to state-owned enterprises (SOEs) have gone from R64.5 billion in 2008 to R707.8 billion in less than two decades.
The biggest contributors to this debt are Eskom, Renewable Independent Power Producers, Transnet, the Trans Caledon Tunnel Authority (TCTA), and Sanral.
Over the past few years, the National Treasury, led by Finance Minister Enoch Godongwana, has been attempting to reduce bailouts to SOEs, taking a “tough love” stance towards enterprises in financial turmoil.
In response to a recent Parliamentary question from DA MP Mark Burke, Godongwana outlined the growth in government guarantees to SOEs from 2008 to 2025.
Burke had asked the minister what he had found to be the contributing factors that caused the proportion of government debt guarantees to stand at almost 10% of GDP, as compared to 2% at the end of 2008.
In response, Godongwana explained that, in 2008, government guarantees to SOEs amounted to R64.5 billion.
At the time, the Trans Caledon Tunnel Authority (TCTA) was responsible for the highest amount at R19.3 billion in guaranteed debt.
Over the past decade, Eskom’s financial struggles have also weighed heavily on the government’s balance sheet.
The power utility has received a total of R350 billion in guarantees, of which R353.7 billion had been utilised by 30 June 2025. This includes accrued interest and revaluation of inflation-linked debt.
In 2012, the Renewable Energy Independent Power Producer Program was also launched, and by 30 June 2025, the guarantee exposure under the program had amounted to R257.2 billion.
Another large contributor to the rise in government guarantees to SOEs was Transnet, which has experienced severe financial struggles over the past decade.
In June 2008, Transnet’s guaranteed debt amounted to R14.7 billion, and by June 2025, the amount had increased to R48.4 billion.
“The biggest contributors would therefore be Eskom, Renewable Independent Power Producers, Transnet, TCTA, and Sanral,” Godongwana said.
Tough love
Government guarantees to SOEs fall under the state’s contingent liabilities, which are state obligations that could result in expenditure if a specific event occurs.
The government closely monitors these liabilities, which also include provisions for multilateral institutions and other fiscal obligations.
Godongwana, since his appointment as Finance Minister in 2021, has taken a “tough love” approach towards supporting struggling SOEs.
While he was instrumental in Eskom’s massive debt relief package in 2023, Godongwana has taken a tough stance on supporting other SOEs like the Post Office and the SABC.
While this has resulted in a decline in the state’s contingent liabilities, they remain substantial, with the National Treasury flagging this burden in its fiscal risk statement in the latest Medium-Term Budget Policy Statement (MTBPS).
Godongwana’s MTBPS in November revealed that the government’s contingent liabilities declined from 19% of GDP in 2020/21 to 15.7% in 2025/26.
In addition, the government’s guarantee portfolio declined marginally from R708.7 billion in March 2025 to R707.8 billion in June 2025.
However, the Treasury explained that several major SOEs remain in financial distress and, therefore, are reliant on government support.
This is concerning, especially considering that, while the guarantee portfolio declined, the government’s exposure increased by R6.2 billion.
This is because SOEs continued to draw on existing guarantees, with the Treasury highlighting Transnet’s R4 billion guarantee and R1.1 billion each from Eskom and the TCTA.
In 2025/26, the government also issued R145.8 billion in additional guarantees to Transnet to support the rail and port operator in addressing funding shortfalls, liquidity pressures and debt redemptions.
This additional support brought the total guarantees issued to Transnet to R196.3 billion.
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