A Facade of Progress
by Charis Esema – Onaolapo
In a recent interview, the Democratic Alliance’s Shadow Minister of Public Enterprises, Ghaleb Cachalia, delivered a grim assessment of South Africa’s economic backbone. According to Cachalia, Eskom, the heart of the nation’s economy, is in critical condition. The dire state of this State-Owned Enterprise (SOE) has pushed the country’s economy into the emergency ward, leaving little hope for recovery.
Eskom, a company plagued by governance issues for years, has become a breeding ground for corruption, mismanagement, lack of transparency, and even sabotage. The magnitude of its troubles is staggering, including a monstrous debt of over R422 billion. This massive debt burden, accumulated over years of neglect, corruption and insufficient infrastructure investment, has pushed Eskom to borrow heavily to keep operations and electricity running. However, servicing the debt while maintaining operational efficiency has proven to be an insurmountable challenge. The consequence, load-shedding, a recurring nightmare for South Africans and a major blow to businesses and the overall economy.
In recent times, South Africans saw a slight decrease in load-shedding frequency. In a subsequent media briefing, Electricity Minister, Kgosientsho Ramokgopa said he was confident that Eskom had enough generating capacity to withstand the cold weather. However, barely a week after the Minister’s prognosis, thanks to the running of already crippled power plants at vastly unsustainable intensity, the power utility announced its remission into another bout of Stage 6 load-shedding.
This negligent overdrive, presumably exercised for public appeasement in view of upcoming elections, is evidently far from a permanent solution. It is in fact, as Jan Oberholzer, previous COO of Eskom, aptly states, akin to operating a car without proper maintenance. Eskom keeps engaging the accelerator, constantly keeping it pressed to the floor despite failing to conduct proper maintenance. It simply does not remedy Eskom’s ailing predicament in any way. This band-aid “solution” does nothing to address the deep-rooted problems that plague Eskom. It is merely a facade, concealing the true extent of the crisis.
Adding fuel to this looming fire, the financial burden on Eskom continues to grow. Government currently is extending significant financial support to keep Eskom afloat. By the end of March 2023, only a month into the new financial year, Eskom had already spent a staggering R3 billion on diesel to maintain its electricity supply during load shedding. This astronomical amount is nearly triple the expenditure for diesel purchases in the same period last year. Burning billions without fixing Eskom’s underlying issues is foolish. Eskom’s critical condition demands extensive maintenance, skilled individuals, and the unyielding eradication of corruption.
Anything less than a comprehensive approach will only perpetuate the vicious cycle of power shortages, leading the country to the brink of total grid collapse.
The impact of Eskom’s financial woes reverberates throughout the South African economy. Frequent power outages resulting from Eskom’s inability to generate enough electricity have disrupted businesses, caused substantial economic losses and have ultimately taken a toll on the country’s fiscal position. These challenges underscore the urgent need to address the systemic issues that plague this SOE.
Therefore, the time for decisive action can no longer be delayed. By prioritising the acquisition of necessary skills, implementing responsible financial management, and ensuring transparency in addressing existing gaps in Eskom, a revitalised era of economic stability can be ushered in.
We however must face the harsh reality that these reforms would be a futile expedition under the current regime, for one cannot rely on the arsonist to miraculously transform into a firefighter. Their attempts made thus far have regrettably been nothing more than a hollow charade, orchestrated solely to appease the public and secure votes. Those who are in power, and who benefit from the very chaos created by their rampant plundering and mismanagement, cannot be trusted to implement the required solutions – why would they, if it would stitch closed their self-enriching pockets?
It is time for a genuine change and decisive action, driven by a sincere commitment to the betterment of our nation’s future.
Charis Esema – Onaolapo is a Policy Advisor at the National Employers’ Association of South Africa (NEASA).
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