South Africa's Ramaphosa vows 'drastic' steps to save state companies

South Africa plunged deeper into darkness and its growth outlook dimmed with utility Eskom announcing unprecedented levels of blackouts on Monday, just as President Cyril Ramaphosa said he would take “drastic” steps to turnaround state firms. Earlier, his transport minister appointed an independent adviser to manage the country’s passenger rail firm, just days after a decision to place South African Airways into business rescue - a form of bankruptcy protection. GDP is unlikely to reach even the national treasury’s sharply lowered forecast of 0.5%, increasing instead the likelihood of the country losing its last investment grade credit rating by early 2020. “It’s clearly a full-blown crisis now, for Eskom and the economy. This past week of load shedding will drag growth into a recession,” said independent political economy analyst Daniel Silke. The decision to place SAA into business rescue was the “only way to secure its survival”, Ramaphosa said in his weekly newsletter on Monday, adding that the move demonstrated the government’s resolve. “We will not allow any of these strategic entities to fail. Rather, we need to take all necessary steps – even drastic ones – to restore them to health,” he said. But the struggling state firms are being kept afloat with bailouts that the government is growing increasingly reluctant to grant.<br/>