South Africans are dumping these government services – and turning to the private sector

 ·16 Jun 2024

From 2019 to 2023, South Africans decreased their dependence on government services, including education, electricity, policing, and public housing.

The reduced quality and availability of public services have led many South Africans to seek private-sector alternatives that offer services comparable to those provided by the government.

This includes turning to private security, healthcare, and education.

A reduction in electricity usage from government-run Eskom has been well documented.

Trade & Industrial Policy Strategies (TIPS), an economic research institution, reported that Eskom’s electricity output decreased by an average of 0.7% per quarter, or 2.7% annually, from the first quarter of 2020 (just before the pandemic) to the first quarter of 2024.

Before that, its production had already been declining, with a decrease of 0.4% per quarter (1.7% annually) from the first quarter of 2011 to the first quarter of 2020.

However, a significant reduction in the usage of other government services has gone mostly unnoticed and only recently started making headlines.

Stats SA revealed a significant decrease in South Africans accessing various government services. This decline was attributed to a lack of access to government services, a lack of trust in state-run institutions, and individual experiences of corruption affecting the state’s legitimacy.

PwC, a financial services firm, analysed this report and stated that the decline reflected a continuous decline in the quality of public services.

The state’s capacity had been eroded due to corruption and incompetence, causing South Africans to seek private alternatives.

Additionally, the country’s public sector is under increasing pressure due to reduced funding and resources, rendering it unable to provide the quantity and quality of services it once did.

Stats SA’s report indicates a widespread decline in the use of government services across all sectors, including well-run institutions.

In 2019/20, over 43% of individuals used public transportation services, but this figure dropped to 37.5% in 2022/23.

The use of public clinics also declined from 35.4% to 31.7% during the same period. In contrast, services such as courts (2.4%), public housing services (2.4%), and correctional services (0.5%) were among the least used in 2022/23.

The declining use of government services is depicted in the graph below from Stats SA. 

While the replacement of these government services by the private sector is not a new concept, PwC suggests going even further by implementing a complete “public-private collaboration model” in South Africa.

This proposed model operates on the basis of a collaborative partnership between the government and the private sector.

Both parties contribute funding and have joint control over the resulting assets.

PwC said that this approach enables the government to fulfil its mandate of delivering public services while granting private entities the legitimacy to operate.

The company has articulated various reasons why it views this model as the most appropriate for service delivery.

From a financial standpoint, the new collaboration model incorporates innovative funding mechanisms that alleviate the burden on government finances, while ensuring that infrastructure assets remain under government ownership.

PwC also recommends the establishment of an independent execution body, with representatives from all partners, to ensure robust governance structures and equitable participation from both the public and private sectors.

This is aimed at preventing an overload on the sector and revitalising confidence in public service companies after a significant decline in usage by South Africans.

Despite these suggestions, however, governance expert Dr Harlan Cloete explained that it is not as simple as recapacitating the state and upskilling government employees.

Cloete said the problem is that even if government institutions and state-owned companies are given more resources and employees are upskilled, it is still a toxic environment to work in.

A toxic environment, filled with corruption, makes employees less productive and government services less efficient.

He explained that, in some cases, the wrong people are employed, and no matter how much the government spends to upskill them, they cannot deliver.

Read: The one city in South Africa that beat the rest on jobs for the last 10 years

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