Corporate Governance Challenges Associated with Government Ownership in State-Owned Enterprises in South Africa and Zimbabwe

Major state-owned enterprises in most African countries are generally less efficient than privately owned companies, which shows in performance differences and, ultimately, in profitability and solvency. In South Africa and Zimbabwe, the state of some major state-owned enterprises in the energy, transport, and communications sectors is poor as they have been bedevilled by corrupt leadership that disregards existing corporate governance and public governance principles regulating them, leading to poor service delivery and failure to contribute sufficiently to the countries’ economies. Examining the state of corporate governance in selected state-owned enterprises in the energy, transport, and communications sectors in South Africa and Zimbabwe, this chapter argues that although companies face different corporate governance challenges regardless of their type, the rising poor corporate governance in major state-owned enterprises in South Africa and Zimbabwe has proven that there are particular corporate governance challenges that state-owned enterprises face because of the government as the owner. In other words, these corporate governance and governance challenges that major state-owned enterprises in South Africa and Zimbabwe are experiencing are exacerbated mainly by government ownership, typically known for being riddled with corruption, excessive political interference, and a lack of accountability. This research identifies and explores the corporate governance challenges associated with government ownership of major state-owned enterprises in South Africa and Zimbabwe. In conclusion, the study suggests reforms necessary to reduce poor corporate governance in state-owned enterprises in both countries due to problems associated with government ownership.