SA may have a fine economic policy on paper, but this is useless if the country cannot provide electricity, finance minister Enoch Godongwana said at a pre-World Economic Forum (WEF) briefing in Johannesburg on Thursday.
“We want to resolve the Eskom issue soon. Part of that is to make sure it has a healthy balance sheet. I will make the appropriate announcement on Eskom on February 22,” said Godongwana.
SA is expected to participate in the annual meetings in Davos, Switzerland, next week and present the country as a strong investment destination.
International relations minister Naledi Pandor said they want to tell investors that SA is open for business and to add the country’s voice to discussion of global issues.
Eskom announced on Wednesday an indefinite reintroduction of stage six load-shedding, or 6,000MW of rotational power cuts, compared with demand that typically fluctuates at about 30,000MW. This is a sharp intensification from when the utility aimed to have stage six only at night.
Stage six subjects households and businesses to as much as 10 hours of power cuts a day.
Rolling blackouts have been a big headache for the ANC-led government as Eskom continues to battle ageing infrastructure, shortages in generating capacity and corruption. Analysts have cited the power utility’s inability to generate enough as “the single largest risk and threat to economic growth” in the country.
The IMF and the World Bank also recently revised downward SA’s GDP forecasts, giving “worsening electricity supply” as one of the reasons. Godongwana said the National Treasury followed suit, revising SA’s 2022 economic growth to 1.6%, lower than the World Bank’s 1.9%, but said that “the electricity crisis is a challenge that can be fixed”.
Godongwana criticised Eskom performance, and said energy minister Gwede Mantashe needs to act urgently to procure more electricity generation. He said that the National Treasury will unveil a plan for the government to take on part of the utility’s R400bn debt in February to make the utility financially viable, but said the quantum must keep SA at a stabilised debt-to-GDP level.
Responding to questions on how SA is going to explain the energy crisis to investors in Davos, Pandor said: “We are not the only country experiencing an energy crisis.
“We have a problem, but we are not sitting, and there are a number of steps we have taken, which I think are very important,” she said, citing the introduction of renewable energy and huge wind and solar projects.
“We are innovating in the hydrogen space, and are looking at repurposing the just energy transition, some of the older power stations and converting them to less-combustion resources.”
Pandor said the government diversified the structure of Eskom. “Yes, we have a serious problem, it will not be addressed tomorrow, but we are going to solve it”.
Pandor also questioned the repeated breakdown of power plants and said they could be seen as “some form of sabotage”.
“We should be investigating why 11 [power stations pack up], all at once, after level 3, for quite a number of weeks. Who is doing what, and what is going on? We can’t live forever in a befuddled state of amazement. Time must arrive when we begin to protest the inadequacies that we are experiencing with energy security,” said Pandor.
“They are actually beginning to look almost like some form of oppositional attack against SA.com and I think we need to pay some attention to what has happened.”
The SA delegation to Davos will be on a mission to promote the country as an attractive destination for foreign direct investment.
Godongwana said the government and private sector must work together as a team to sell SA as the preferred location for multinational investors in Africa.
zwanet@businesslive.co.za
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