For more than a decade, there was no indication that South Africa’s growth story would get any happier.
The long-term indolence has been punctuated by painful recessions and limp rallies, with little hope that the economy will improve enough to undo the damage of the previous era. The longer the growth stops, the more difficult it is to change course.
Playing no small part in this situation is Eskom, which has become a totem of our collective despair.
No one, it seems, is immune to the feeling of backwardness that accompanies our energy crisis – not even the chair of the utility board, Mpho Makwana, who recently proposed that we endure two or three permanent phases of load-shedding in the next two years. Eskom quickly backtracked, noting the proposal would not save us from more intense blackouts.
What this incident has revealed is that there is no agreement on how best to deal with this crisis. However, if this dithering continues, many more sacrifices are ahead and any dream of economic growth-saving will continue to be postponed.
In response to the latest demoralizing news related to the besieged electricity utility, President Cyril Ramaphosa recently warned against short-term fixes. He stressed the importance of staying on course and pursuing “realistic” government, 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 caused a sense of déjà vu, with the president intermittently having to renew his efforts to address a long-deteriorating situation.
In an attempt to quell discontent over the current blackout, Ramaphosa also said he has asked Eskom to stop implementing the 18.65% tariff increase. Eskom was given the increase to help cover its mounting debt, which is reducing its ability to maintain its aging coal fleet.
Critics point to Ramaphosa’s efforts to stop Eskom from raising tariffs as an example of him undermining those charged with balancing utility and public interests, including South Africa’s National Energy Regulator.
Energy expert Lungile Mashele asked in an interview: “If not, why do we have a regulator? Why do we have a department of public companies as shareholders? Why do we have a department of mineral resources and energy, if the president knows what he is doing?”
Complicating matters is the fact that, although the Ramaphosa government struggles to give the impression that it knows what it is doing, there is no evidence of this.
The government has said it has a plan to solve the current energy crisis. However, whether these interventions will be seen – whether they will actually make a difference or respond to our reality – remains to be seen.
Earlier this week, trade union federation Cosatu said proposals to impose a fixed burden state would spell disaster.
“The proposed two-year time frame is wasted by institutions that have yet to come up with a coherent and convincing road map on what they intend to do to drastically reduce electricity in the next six months,” the federation said.
“We are forced to tolerate mediocrity or business as usual in the face of a national emergency.”
Cosatu also stated that, in December 2020, it and other stakeholders adopted a social compact aimed at supporting Eskom and driving inclusive economic growth.
Despite signing the compact, Cosatu said, the government has consistently delayed the implementation of key commitments. If there really is a plan to solve the energy crisis, why is there so little?
South African Business Leadership also shares this frustration.
“Solutions will be proposed, maybe some new ones will be adopted, but effective implementation remains elusive and the crisis is growing – as has been the case since the first attack in 2007,” said the organization’s chief executive Busisiwe Mavuso last week. .
“Despite the need for more generation capacity that was highlighted in the late 1990s, we still haven’t been able to add enough megawatts to the grid to meet demand.”
“There is a sense of despair,” Mavuso later wrote, “if we do it all over again because the solution has been put in place so many times.”
Eskom, and the fate of the country’s energy grid, has long been in the hands of political representatives. In fact, it is the basis of the country’s economy, it cannot be denied that it will also be vulnerable to many similar interests.
These forces have played a part in the Eskom privatization push, which has found expression in many forms over the years, each of which has been a hard sell in social democracy.
Initial privatization bids in the late 1980s resulted in the utilities eventually being transferred to the department of public enterprises, which was established to oversee the restructuring of state entities in line with Thatcherist policies.
The dilemma that arose from this decision – one of the many political moves that helped Eskom into crisis – is still being played out today, as ministers are pitted against ministers in a battle over who gets to direct the utility.
Meanwhile, Eskom has been pulled in two very different directions, on the one hand it has to meet the demands of the company and serve the interests of the energy-hungry public on the other.
In the years since the utility moved into the public enterprise department, the country’s energy demand has grown, eventually outstripping supply, while Eskom’s rates have fallen markedly.
Alarm bells rang but apparently went unheeded until it was too late and the house was well and truly on fire.
Eskom has been in crisis mode since 2008 and it doesn’t help that the government has not responded to this crisis beyond politicians meddling to serve their own interests. By way of obscure utility, there is always a kind of paralysis.
Then there is the ambivalence of self-governing parties, as a result of the thin line between social democratic ideals and neoliberalism. If the party continues to create Eskom in its own image, there is no hope of movement.
Sarah Smith is a Mail & Guardians business reporter.