January has been a chastening month for SA citizens. Persistent, deep levels of load-shedding, regularly escalated to stage 6, have become a part of normal life rather than an exception.
The casualties — from small businesses going under to large businesses losing significant trading days and citizens losing productive hours and opportunities to earn an income — have been well documented.
Eskom’s inability to address the crisis was not helped by energy regulator Nersa’s recent approval of tariff increases. Such increases also come in a persistent cost-of-living crisis that has kept inflation high and hit incomes.
As fate would have it, such inflation levels trigger the Reserve Bank into action, and it is expected to once again increase interest rates at the conclusion of its monetary policy committee meeting this week.
These multiple blows have hit citizens hard, and naturally questions have been asked about what the state can do to cushion the blows. For the electricity crisis Nersa granted Eskom considerably less than the 32% increase it requested, capping it at 18.65%.
Given the centrality of energy to everything we do, that increase on its own will worsen the inflation crisis and feed into deeper inflation. In response to the public outrage and political heat generated by the announcement, political players have scrambled to offer responses.
Public outrage
These have ranged from proposed marches to President Cyril Ramaphosa’s bizarre plea to Eskom to simply ignore the regulator and the litigation launched against Eskom by various political playmakers.
All of these are nobly aimed at accommodating the public outrage, especially as Eskom is such a source of frustration for everyone.
At the heart of the energy and inflation crisis is a government that has done little to exhibit an ability to address the driving factors. The response to the energy crisis is a confusing cacophony of voices saying different things and creating further chaos.
The implicit civil war between energy minister Gwede Mantashe — who insists he can do better at overseeing Eskom — and public enterprises minister Pravin Gordhan, who has spent five years showing he can’t — has not been addressed by the president, who insists on yet more consultation on a 15-year-old crisis.
When the Reserve Bank raises interest rates the knee-jerk reaction is to accuse them of condemning all of us into deeper poverty by seeking to address cost-push inflation with interest rates rises that do little to address the inflation sources.
At the 2022 ANC national conference delegates finally seem to have understood that the Reserve Bank has an ownership structure and a constitutional mandate. While they previously issued stillborn resolutions about the ownership of the Bank, they have now warmed up to the understanding that the Bank currently has just one primary instrument of intervention, which is in line with the monetary policy task it has been given. In executing this duty the Bank inevitably draws criticism, despite repeated explanations of its current mandate.
Few consequences
As the ANC government scrambles, the collective sense of frustration has escalated the risk of civil unrest. In July 2021 the trigger points were political, and since then — despite obvious red flags — the state has done little to address the social triggers that could spark more unrest.
The loss of more than 300 lives last year with few consequences for any perpetrators may simply embolden more people should more unrest arise. Concerningly, incidents of citizens taking the law into their own hands through movements such as Dudula are increasingly surfacing in the media.
This development, of nonstate players occupying the role of the state through formal mechanisms such as litigation and informal mechanisms, represents the consequences of a state that has retreated from its leadership and governance role.
This retreat will create more economic, social and human casualties as long as government keeps consulting and bickering.
• Sithole is an accountant, academic and activist.
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