Finance minister Malusi Gigaba has defended the performance of state-owned enterprises saying they create jobs and improve the SA economy.

Despite the fact other airlines operate in South Africa‚ Gigaba said without South African Airways‚ tourists and business people would not be able to fly to and around South Africa.

“Without SAA we would not bring as many people as SAA brings to the southernmost tip of Africa. We would not be able to transport business people‚ investors and tourists across South Africa.”

Gigaba was speaking at the Ekurhuleni Investment Summit held at Emperors Palace at Kempton Park on Monday.

He said state-owned enterprises played an integral role in SA’s economy and “build critical economic and social infrastructure‚ drive investment and transformation“.

 Praising parastatals‚ Gigaba said: “Without South African state-owned companies‚ we would not have the road infrastructure we have. We would not have the electricity we have“. He praised Eskom for having a surplus of electricity‚ which it exports to other African countries.

SAA last made a profit in 2011 and relies on government funding to keep it afloat. Eskom had R322 billion worth of debt at March 1.

Standard & Poor’s cited the poor performance of state-owned enterprises as a reason for downgrading South Africa’s foreign owned debt to junk status.

But Gigaba said of the enterprises: “They are actually functioning very well.”

At the time of the downgrade‚ Standard & Poor’s said: “Other state-owned entities that we think still pose a risk to the country’s fiscal outlook include national road agency Sanral‚ which is reported to have revenue collection challenges with its Gauteng tolling system and South African Airways which may be unable to obtain financing without additional government support. … Broader reforms to state-owned enterprises are still being discussed and we do not foresee implementation in the near term.”

Former finance minister Pravin Gordhan frequently called on state-owned enterprises to be properly run before asking for more bailouts from Treasury and frequently butted heads with SA chairperson Dudu Myeni over the bailouts to SAA.

 But Gigaba said Eskom‚ Transnet and SAA “were making a significant contribution to the economy“. He said SAA would turn around.

“I want to put my head on a block and say even SAA can and will turn around.”

Gigaba said: “I believe there is nothing inherently inefficient in state-owned companies. They pay well and have attractive incentives. Therefore they should be able to attract capable and well qualified professionals to run these things.

“Yes there are problems‚” [ at state owned enterprises]‚ he admitted “We must fix the governance problems.” He blamed government as the shareholder for not paying sufficient attention to parastatals’ governance.