20 February 2019

South Africa: Hard Reality Check for Eskom, Public Wage Bill and No Love for Taxpayers

Photo: GCIS
President Cyril Ramaphosa with Finance Minister Tito Mboweni ahead of the Budget 2019 Speech.
analysis

In a hard-hitting Budget that bluntly put a daily R1-billion price tag on borrowing costs, Finance Minister Tito Mboweni pulled off a political juggling act "in the interest of our people and our country, and not in the narrow objectives of any political party". Mboweni's maiden R1.83-trillion Budget, delivered with a little help from three Bible verses and Charles Dickens, was a hard reality check to Eskom, which got left with all its debts to pay itself. The role of the public sector trade unions in reducing the public wage bill emerged as key, as well as taxpayers - who get no notable relief.

Eskom did not get what it wanted, and what was widely expected - a R100-billion debt swop by which government would take over a share of the power utility's R419-billion debt book on to its own. Instead, Wednesday's Budget allocated the power utility a R23-billion a year injection for the next three years, or R69-billion in total, to support the restructuring into three units that President Cyril Ramaphosa announced in his State of the Nation Address (SONA) earlier in February.

Those billions come with conditions, including the appointment of a chief...

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