A virtual meeting of the National Economic Development and Labour Council (Nedlac) chaired by President Cyril Ramaphosa on Tuesday agreed on a social compact to mobilise funding to address Eskom's financial crisis.
The social partners, who include organised labour, the government, business and community stakeholders, want the power utility funded “in return for an efficient, productive and fit-for-purpose Eskom that generates electricity at affordable prices for communities and industries”.
Ramaphosa will announce the details of the plan once it has been finalised by the cabinet.
But he has previously said Eskom — which has nearly R450bn debt — was too vital to SA’s economy to be allowed to fail. The state-owned company, which has been hollowed out by years of looting linked to state capture, has been implementing load-shedding after a depletion of its emergency generation reserves and multiple unit breakdowns in the past few weeks.
The cash-strapped power utility received R59bn from the government in 2019 to service its debt through the special appropriation bill.
The Nedlac meeting on Tuesday was aimed at tracking progress made since the last one convened on August 13, where the partners tabled proposals for an economic recovery plan to turn around the embattled economy — expected to contract 7% or more in 2020 and lead to huge job losses.
The six-month lockdown imposed by the government in its effort to curb Covid-19 infections, has had a devastating effect on SA's already weak economy, with Stats SA last week revealing that it shrank at an annualised rate of 51% during the second quarter. The worst quarterly collapse on record.
The economic recovery plan submitted to Ramaphosa on Tuesday proposed infrastructure development as the silver bullet to drive economic recovery in SA. The government has already committed R100bn over the next 10 years towards the infrastructure fund.
Ramaphosa welcomed the plan, hailing it a “great achievement that rises on the challenge of the moment”.
Business Unity SA CEO Cas Coovadia said: “The president said he will process the plan and then an announcement will be made. We’ve worked on the plan, it’s up to him now to make the necessary announcements.”
Cosatu parliamentary co-ordinator Matthew Parks said the plan mooted infrastructure development as a vehicle to drive economic recovery. “It focuses on key infrastructure projects such as rail, ports and roads, and finding resources from both the private and public sector to stimulate economic recovery.”
The plan also talked about tackling the corruption scourge, the need to rebuild power utility Eskom because “it’s critical to have an affordable and reliable power supply to drive economic growth”.
Modupi Maile, first deputy president for international affairs of the National Council of Trade Unions (Nactu) said the economic recovery plan was now due for consideration and finalisation by the cabinet.
The presidency said Nedlac agreed on the plan, which is founded on “significant convergence on what needs to be done to set the economy on a new, accelerated, inclusive and transformative growth trajectory”.
“Social partners have identified priority areas for rebuilding the economy as well as structural reforms and other programmes which will enable sustainable and inclusive growth with an intensive focus on job creation,” the statement said.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.