South Africa: 72 Hours in Late March - When Eskom Pushed South Africa to the Edge of Financial Collapse

Eskom's national control centre (file photo).

Beneath the electioneering bubble of sound bites and choreographed photo opportunities lies an economic governance nightmare. For 72 hours at the end of March 2019, Eskom took South Africa to the brink. In this season of securing power by citizens' votes, it seems no one really cared to notice -- and those in charge made sure it stayed that way.

For 72 hours from 26 March 2019, South Africa stood at the edge of economic collapse as Eskom ran out of money and could not meet its liabilities and obligations. A scramble to raise money ensued as government cannot allow an economic collapse by Eskom default.

A R3-billion commercial loan on the back of government guarantees was obtained on 29 March. It was repaid with the R5-billion disbursed from the R17.652-billion authorised by Finance Minister Tito Mboweni in terms of the Section 16 emergency provisions of the Public Finance Management Act (PFMA) on 2 April.

If Eskom had defaulted, it would have triggered the immediate demand for repayment of R281-billion the power utility leveraged against government guarantees as part of its overall R419-billion debt. This kind of money is simply not available in the national coffers, as emerged in February's...

More From: Daily Maverick

Don't Miss

AllAfrica publishes around 800 reports a day from more than 130 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.