How Eskom is fuelling South Africa’s economic crisis

South Africa’s state power utility Eskom is one of the biggest challenges facing the country. Mess up Eskom, and you mess up the country. And it looks as though key players are doing just that. 

The past two weeks will be remembered as the start of a cataclysmic economic crisis caused by the failure of three powerful men to spend enough time in a room to find a comprehensive solution that would turn the current crisis facing the utility into a great opportunity for South Africa’s energy and economic future. And to finally break from the country’s past. By refusing to align their policies and strategies, the three ministers — from energy, finance and public enterprises 

What we see in Chile, where public angerhas spilled out onto the streets, is what can be expected to emerge as ordinary South Africans experience the true implications of this failure to decisively resolve the crisis. are responsible for triggering a crisis that will be resolved on the streets. 

What’s at stake is not just the short-term crisis and how the country keeps its lights on. At the core, the crisis is about finally transcending the powerful minerals-energy sector (coal mines plus Eskom), which is a major pillar of the South African economy — a sector that has survived the end of apartheid.

The ministers, with decisive leadership from President Cyril Ramaphosa, had a golden moment to take the first step by releasing South Africa from the stranglehold of a debt-laden Eskom in an unstoppable death spiral.

But three opportunities were missed. They were: a new energy plan led by the minister of minerals and energy; a roadmap for the power utility led by the Minister of Public Enterprises; and the medium term budget led by the finance minister. 

They failed to combine their respective policies into an integrated framework for transitioning to renewables, transforming Eskom and managing the utility’s ballooning debt.  

In the final instance, it is the president who needs to call his ministers to order. The open question is whether Cyril Ramaphosa can act decisively to coordinate them to clearly and unambiguously address the Eskom crisis