South Africans were lucky enough to have the power to watch television this week during a blackout to witness a brutal denunciation of the African National Congress as a kleptocracy that has robbed the country of its power.
After André de Ruyter, the chief executive of electricity utility Eskom, told the eNCA news channel that the coal-fired power station at the heart of the energy crisis had been turned into an ANC “feeding trough”, the ruling party accused him of being “regressive”. political and ideological agenda”.
De Ruyter, who also referred to unnamed “high-level politicians” involved in corruption that the minister protected, was removed from his post by the Eskom board on Wednesday.
No chief executive of a South African state-owned company has ever criticized those who control such important assets in such a hard way – but it shows the discontent in the country that could make de Ruyter an angry ANC target.
South Africa has a vibrant civil society, prying investigative journalists and an active opposition. The Democratic Alliance, the official opposition, has demanded, under a freedom of information request, that “Eskom Management . . . publicize the names of the senior ANC politicians concerned”.
Business groups also demanded a quick investigation, “especially because of allegations that ministers and presidential advisers knew about ongoing corruption and did nothing.”
Cyril Ramaphosa assumed the leadership of the ANC in 2017 with a promise to eradicate the corruption that had been rampant under his predecessor Jacob Zuma.
But de Ruyter’s allegations, related to rampant corruption in other parastatals, have, analysts said, exposed the failure of the search for the president and revealed that the ruling party is rotten with corruption.
De Ruyter, whose recruitment from the private sector three years ago to rescue Eskom was approved by the ANC, announced in December that he would resign after being accused by the energy minister of treason.
“Clearly, I am suspicious of treasonous activities, but the real perpetrators can act with impunity,” said de Ruyter.
The allegations raise the biggest problem facing South Africa’s economy: how to rid the ANC of the state-owned enterprises that dominate its activities but have caused the country to collapse. According to the South African Reserve Bank, ongoing blackouts cost the economy $51 million a day.
For the ANC, the possibility of extending the liberation movement’s grip on South Africa’s democracy into a fourth decade in next year’s elections will blink in the darkness of power cuts that last up to 12 hours a day.
“The energy crisis is a big risk for the prospects of the election… when de Ruyter said that [Eskom] is being thrown from the inside by the ANC at the highest level, it removes the credible opposition,” said Khaya Sithole, a political analyst. Recent polls put the party’s support at 40 percent after winning more than 57 percent in 2019.
That Eskom has been ruined by corruption, sabotage and political interference has been documented. But before now, “you don’t have someone who has intimate knowledge as a chief executive who beats away from the name”, Sithole added.
As a result, the defenestration of de Ruyter shows “an element of panic” by the ANC: “a very knee-jerk reaction to stop people from speaking at all costs”.
On the day the chief executive was ousted this week, the National Treasury said it would pay and partially assume about $14bn, or two-thirds, of Eskom’s debt. The three-year operation is designed to free up cash to repair power stations and prevent defaults.
“It’s not ideal, but it’s the best decision because of Eskom’s fiscal predicament,” said Thabi Leoka, an independent economist. But the bailout will push the country’s debt down as a share of gross domestic product.
“You need three more years,” Leoka said. “This also happens when there are tight monetary conditions around the world, because interest rates are high, and the cost of capital is rising.”
The debt relief also shows the tension between maintaining state control of Eskom and hoping for a dose of private efficiency. Treasury has ordered that for the money, Eskom must open underperforming power plants to private concessionaires and “allow for extensive private sector participation” in transmission.
The Treasury is trying to convince the market and rating agencies that they can stop the relief disappearing into a black hole, said Sithole. But it did not have the effect of enforcing the claim because it could not risk Eskom’s bankruptcy, he said. “We all know that is completely absurd. Eskom is completely free to ignore the situation.
The Ramaphosa government has long ignored similar promises, such as the three-way split of Eskom into generation, transmission and distribution entities. In de Ruyter, Eskom is preparing a separate transmission company but the country has not yet launched it.
Investors want to build private power projects to help prevent blackouts, but need certainty about transmission investments to know if they can connect to the grid, Leoka said.
“What has been missing in the whole puzzle of the energy crisis has been the speed,” he said. “There is a total collapse of Eskom because of this lack of urgency.”
Sithole added: “They don’t know how to manage [state] entity. The frustration is not limited to Eskom. Perhaps others have not been blunt enough [as de Ruyter] speak loudly.”
Before the explosive TV interview, de Ruyter told the Financial Times: “In our engagement with private investors, we are still very dependent on the South African expedition, Madiba. [Nelson Mandela] magic.
“You know, that’s long gone. The world owes South Africa nothing.
Additional reporting by David Pilling in Johannesburg