Sona 2023 – yes, we must fix Eskom, but just as important is fixing the disastrous state of our rural economy

Perhaps it is a bit like saying that water is wet if I mention here that the mood across South Africa right now is foul. There is a lot of anger about the electricity situation. Following closely behind that is unhappiness about water challenges, jobs, crime, gender-based violence, etc, etc.

The electricity situation in particular is an emergency. In fact, it has been for quite a while. Energy Minister Gwede Mantashe reminded us the other day that Eskom’s energy availability factor (EAF) has dropped from the high seventies to about 49%.

In a sobering reminder of what ordinary people across South Africa’s cities are going through whenever the lights go out, the Sowetan published a front-page listing people and businesses adversely affected by rolling blackouts. They were all struggling small businesses and “hustlers” – you know, people who have to bring in some money every day in order to put food on the table.

So, President Cyril Ramaphosa has his work cut out for him. South Africans will be following his State of the Nation address (#SONA23) very carefully to get answers.

I am not going to repeat the wish-list that all major media houses across the land have been churning out for weeks. I just want to do two things here.

First, I want to suggest a solution to the energy crisis that Ramaphosa has mooted before but never really put into practice. Second, I want to remind people that, believe it or not – and this is going to be very controversial – the electricity issue is not the number-one priority for a majority of South Africans.

To the first point, Eskom’s energy availability factor of 49% is a disaster. The causes, of course, are well known: an ageing coal fleet, construction issues with Medupi and Kusile, the brain drain at Eskom, rent seekers trying to hold the power utility hostage, and a hot international market that is buying a lot of the high-quality inputs that Eskom needs.  

Read in Daily Maverick: “No, Joseph Mathunjwa, Biden isn’t forcing Ramaphosa to pick IPPs over baseload” 

Ramaphosa has made reforms to improve electricity access and there is power coming online now more rapidly than has happened in the nation’s history. However, those efforts are being let down by the instability of the coal fleet as well as well-known intermittency issues with renewable energy. So, more capacity needs to be installed quickly from a variety of sources.

The President and his government have said South Africa must work together to solve this issue. Unfortunately, what we are witnessing is the slow-motion privatisation of Eskom.

Mantashe famously said on 8 December 2022 that “any other government can be overthrown for this level of load shedding. Eskom, by not attending to load shedding, is agitating for the overthrow of the state. If it is not addressed, then the state will be failing to do what it needs to do… load shedding is urgent; it must be attended to sooner than later.”

Eskom has looked everywhere for money. It got about $8.5-billion at COP26 and another $10-billion at COP27. Germany has also offered a clear hydrogen import deal to South Africa. Investors have come from all over the world to participate in Eskom’s independent power producer (IPP) deals.

However, where Eskom and the government have not looked for help is the South African people.

A lot of the profits that IPPs are going to get for two decades should be going into the pockets of ordinary South Africans. The President should enter into a compact with South Africans to build the Eskom of the future. South Africans can participate in two ways.

Think like an Egyptian

Think rural