For over a decade, South Africa’s state-owned enterprises (SOEs) have been synonymous with scandal, inefficiency, and financial drain. These companies, responsible for critical services like electricity, transport, and defence, were once pillars of the economy but became burdened by corruption, mismanagement, and mounting debt.
The era of “state capture” saw billions siphoned off through dodgy contracts and political interference, leading to operational breakdowns that affected everyday life. Power cuts crippled businesses, rail lines fell into disrepair, and airlines teetered on bankruptcy. By the early 2020s, SOEs like Eskom and Transnet were posting massive losses, with total bailouts exceeding R500 billion, putting immense pressure on the national budget.
Yet, as of early 2026, there are tangible signs of improvement. Losses are narrowing, services are stabilising, and some SOEs are even turning profits. This isn’t a complete revival—challenges persist—but it’s a shift driven by better governance, stricter financial controls, and collaborations with private firms. For ordinary South Africans, this could mean more reliable electricity, smoother transport, and a boost to jobs and growth.
What Went Wrong: A Legacy of Failures
The troubles trace back to governance lapses and corruption exposed by the Zondo Commission in 2022. At Eskom, poor maintenance and coal supply scandals led to rolling blackouts, known as load shedding, which peaked in 2023 and shaved points off GDP growth. Transnet’s ports and railways suffered from equipment theft and underinvestment, causing export delays that cost the economy billions. Denel, the defence manufacturer, faced liquidity crises after irregular spending, halting production and losing contracts. South African Airways (SAA) accumulated R50 billion in debt through mismanaged expansions and bailouts, culminating in business rescue in 2019. The Passenger Rail Agency of South Africa (PRASA) saw its network vandalised during the Covid-19 lockdowns, with passenger numbers plummeting. The South African National Roads Agency (SANRAL) struggled with tolling disputes and funding shortfalls, delaying road upgrades.
These issues stemmed from weak boards appointed for political reasons, lack of accountability, and a culture of bailouts without reforms. Debt ballooned—Eskom alone owed R400 billion—while operations collapsed, eroding public trust and investor confidence.
What Has Changed: Reforms and Practical Fixes
The turnaround began with the establishment of the Presidential State-Owned Enterprises Council in 2020, which pushed for professional leadership and independence from political meddling. Key changes include a “no bailout without conditions” policy, where funding is tied to performance targets. Financial discipline has been enforced through cost-cutting, debt restructuring, and revenue recovery. Private-sector partnerships have injected expertise and capital, while operational fixes—like maintenance drives and technology upgrades—have addressed root problems.
Government oversight has strengthened via the Department of Public Enterprises (now being phased out) and parliamentary committees, ensuring boards are skilled and accountable. Policy stability under the GNU has helped, with the Medium-Term Development Plan 2024-2029 outlining clear goals for SOEs to support economic growth.
Progress at Key SOEs: Real Examples of Improvement
Eskom, the power utility, has seen the most dramatic shift. After years of load shedding, South Africa enjoyed over 200 consecutive days without blackouts from March 2024. The energy availability factor—a measure of how much power plants can produce—rose to 60.6% in 2025 from 54.6% the year before, thanks to aggressive maintenance and partnerships with equipment makers. Financially, Eskom posted a R23.9 billion profit before tax in 2025, its first in eight years, driven by 15% revenue growth and a 14% cut in fuel costs. New leadership, including CEO Dan Marokane, has focused on fleet performance, with a target of 70% availability in 2026.
Transnet, handling ports and freight rail, is on a recovery path outlined in its 2023 plan. Freight volumes grew, with targets to reach 180 million tons in 2026 from 160 million in 2025. Losses narrowed to R1.9 billion in 2025 from R7.3 billion previously, aided by R51 billion in government guarantees for infrastructure. Ports are investing R4 billion in equipment for 2025/26, reducing backlogs through private operators at Durban and Cape Town.
Denel serves as a primary example of a state institution that has successfully clawed its way back from the brink of total collapse. The arms manufacturer reported a significant operating profit of R390 million in its 2023 cycle, marking its first move into the black since 2016. This fiscal recovery has been underpinned by a 98% reduction in annual irregular expenditure, reflecting a rigorous tightening of internal governance and financial controls. With a newly appointed executive team at the helm, the entity is now working towards an ambitious revenue target of R3 billion by 2028. The current focus remains on stabilizing day-to-day operations and securing the international contracts necessary to sustain this hard-won momentum.
SAA, relaunched in 2021, is expanding steadily. Its fleet grew from 18 to 21 aircraft by late 2025, with plans for 24 by 2026. A five-year turnaround plan includes raising R2.25 billion and new routes, like more flights to Lagos. A new board appointed in 2025 emphasises partnerships for network growth.
PRASA has revived passenger rail after vandalism wiped out services. By 2025, 35 of 40 corridors were operational, with passenger trips doubling to 77 million in 2024/25. Investments of R21.1 billion are funding new trains and infrastructure, boosting commuter access.
SANRAL is upgrading roads with a R7 billion loan from the New Development Bank, part of a $21.85 billion three-year plan. Projects focus on safety and connectivity, with continuous maintenance to reduce costs and improve travel.
The Role of Oversight and Accountability
Central to these gains is stronger government oversight. Boards are now appointed based on expertise, not loyalty, with performance contracts holding managers accountable. The SOE Council monitors progress, while policy stability avoids the flip-flops of the past. Private partnerships bring skills, like experts aiding Eskom’s plants, ensuring reforms stick.
Why These Improvements Matter for Ordinary South Africans
Reliable SOEs directly impact daily life. Eskom’s stable power means fewer factory shutdowns, preserving jobs in manufacturing and mining. Transnet’s efficient ports help exporters, lowering food and fuel prices. PRASA’s trains offer affordable commuting, easing traffic and connecting people to work. SANRAL’s roads improve safety and reduce transport costs for goods. Overall, these fixes could add 2% to GDP growth, creating employment and reducing poverty. For families, it means lights on at home, trains running on time, and a stronger economy lifting wages.
Remaining Risks: Why the Turnaround Is Fragile
Despite progress, vulnerabilities remain. Debt is still high—Eskom’s municipal arrears hit R94.6 billion in 2025—and could trigger crises if not addressed. Operational risks like theft at Transnet persist, and political interference could resurface. Reforms depend on sustained funding and private investment, which might falter if global conditions worsen. Audits highlight compliance issues, and without ongoing accountability, old habits could return. The turnaround is progress, not permanence.
Why This Time Feels Different
In the past, turnaround strategies were often just glossy brochures designed to appease voters or ratings agencies. This time, the reforms feel more sustainable for three specific reasons.
First, the involvement of the private sector has created a “point of no return.” Once private companies are running trains or managing port terminals, it becomes much harder for the state to revert to a dysfunctional monopoly.
Second, the transparency of reporting has improved. With the help of independent monitors and business task teams, it is now harder for SOEs to hide their failures.
Finally, there is a broad social consensus. From big business to trade unions and civil society, there is a shared understanding that the country cannot survive another decade of decline. The progress we see today is built on a foundation of necessity, and that is often the strongest foundation of all.