South Africa: Saving Eskom Requires Tough Decisions - Not Magical Thinking


Already three finance ministers ago, Eskom was described as the biggest risk to South Africa. Tough decisions had to be taken, but instead what unfolded was a search for that pot of gold at the end of the rainbow. It's necessary to cut through the BS.

South Africa and Eskom today are back where they were in January 2019, except worse for wear. Eskom's debt has increased in the past seven months to R450-billion, from around R419-billion. And it can't meet its obligations after October, as President Cyril Ramaphosa put it in his June State of the Nation Address. The power utility pushed South Africa to the edge of financial collapse at the end of March, triggering an emergency intervention to fund Eskom's liabilities it could not otherwise meet.

What are the financial options?

All choices are bitter, particularly given the frayed public purse. But the options haven't changed, regardless of political massaging and kicking for touch in the hope of a unicorn solution. It might not be a case of either or, but there are only three options:

One, cash bail-outs. That's already happened, once and then again. February's Budget allocated R23-billion for 2019, and the next nine years...

See What Everyone is Watching

More From: Daily Maverick

Don't Miss

AllAfrica publishes around 700 reports a day from more than 140 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.