For more than a decade, there has been little to indicate that South Africa’s growth story is destined to take a much happier turn.
Long periods of slack have been punctuated by painful recessions and limp rallies, leaving little hope that the economy will ever be buoyant enough to undo the ravages of the previous period. The longer growth has stagnated, the more difficult it has become to turn around.
Playing no small part in this state of affairs is Eskom, which has become something of a totem of our collective despair.
No one, it seems, is immune to the feeling of resignation that has accompanied our energy crisis, not even the utility’s chairman of the board, Mpho Makwana, who recently suggested that we could endure stage two or three of power disconnection. permanent charge for the next two years. Eskom quickly backtracked, noting that the proposal would not save us from more intense blackouts.
What the incident revealed is that there remains little agreement on the best way to address this crisis. But if this faltering persists, many more sacrifices lie ahead and any dreams of economy-saving growth will continue to be deferred.
Responding to the latest spate of demoralizing news related to the embattled electric power company, President Cyril Ramaphosa recently warned against short-term solutions. He stressed the importance of staying the course and seeking the government’s “realistic”, albeit slow, solutions to the energy crisis.
Ramaphosa’s interventions last week, including his decision to cancel a trip to the World Economic Forum in Davos, have sparked a sense of déjà vu, with the president intermittently mustering a renewed urgency to address a situation that has been deteriorating for a long time. .
In his effort to ease anger over the current blackouts, Ramaphosa also revealed that he had asked Eskom to postpone the implementation of its 18.65% rate increase. Eskom received the increase to help cover its mounting debt, which has hampered its ability to maintain its aging coal fleet.
Critics have pointed to Ramaphosa’s effort to prevent Eskom from raising rates as an example of how it undermines those charged with balancing the interests of the utility and the public, including South Africa’s National Energy Regulator.
Energy expert Lungile Mashele asked in an interview: “Otherwise why do we have the regulator? Why do we have the department of public companies as a shareholder? Why do we have the department of mineral resources and energy, if the president knows what he does?
Complicating matters is the fact that despite the Ramaphosa administration taking pains to give the impression that it knows what it is doing, there has been little evidence of this.
The government has been saying it has a plan to solve the energy crisis for some time. However, it remains to be seen if these interventions will take place, if they will really make a difference or respond to our realities.
This week, the Cosatu union federation said the proposal to implement a permanent state of disconnection of loads would result in calamity.
“This proposed two-year time frame is being undermined by an institution that has failed to present a coherent and compelling roadmap for what they intend to do to drastically reduce power outages in just the next six months,” the federation said.
“We are being forced to tolerate mediocrity or business as usual as we face a national emergency.”
Cosatu also noted that, in December 2020, he and other stakeholders adopted a social pact aimed at supporting Eskom and driving inclusive economic growth.
Despite signing the pact, Cosatu said, the government has continuously postponed the implementation of its key commitments. If there is indeed a plan to solve the energy crisis, why has so little come of it?
Business Leadership South Africa has also raised this frustration.
“Solutions will be proposed, perhaps new ones adopted, but effective implementation remains out of reach and the crisis is worsening by the day, as it has been since the first load-cutting episodes in 2007,” the chief executive wrote last week. of the organization, Busisiwe Mavuso. .
“Despite the need for increased generation capacity being highlighted in the late 1990s, we still have not managed to add enough megawatts to the grid to meet demand.”
“There is a sense of despair,” Mavuso later wrote, “that we are doing it all over again, as the solutions have been presented time and time again.”
Eskom, and the fate of the country’s power grid, have long been in something of a political vice. Since the utility is at the heart of the country’s economy, it is inevitable that it is also vulnerable to many opposing interests.
These forces have played a role in Eskom’s protracted privatization drive, which has found expression in many different forms over the years, each of which has been a hard sell in a social democracy.
The initial privatization offer in the late 1980s resulted in the utility eventually being moved to the public companies department, established to oversee the restructuring of the country’s state-owned entities in line with Thatcherite policy.
The dilemmas that arose from this decision, one of many political moves that helped plunge Eskom into crisis, still loom today, as minister squares off with minister over who runs the utility.
Meanwhile, Eskom has been pulled in two very different directions, having to meet the demands of its corporatization on the one hand and serving the interests of an energy-hungry public on the other.
In the years since the utility’s transfer to the public companies department, the country’s energy demand has grown, eventually outpacing supply, while Eskom’s tariffs have fallen in real terms.
Alarm bells rang, but were apparently ignored until it was too late and the house was actually on fire.
Eskom has been in crisis mode since 2008 and it hasn’t helped that the government has failed to respond to this collapse beyond politicians interfering to serve their own narrow interests. With the course of the utility company so unclear, a kind of paralysis was inevitable.
And then there is the government party’s own ambivalence, as a result of straddling its social democratic ideals and neoliberalism. If the party continues to create an Eskom in its own image, there is no hope of movement.
Sara Smith is a mail and guardian business reporter
