Business organisation Business Leadership South Africa (BLSA) says neither the creation of a new post for an Electricity Minister, nor the declaration of a state of disaster, as announced during President Cyril Ramaphosa's State of the Nation Address last week, provide a clear opportunity for business to partner to relieve the energy crisis.
“It is extremely difficult for many businesses to make investments in the current environment. Loadshedding is the most obvious challenge,” says BLSA CEO Busi Mavuso.
“Business has been a strong supporter of the National Electricity Crisis Committee (NECOM), which has worked hard to identify the many interventions that can help to relieve the crisis. However, I am concerned that the new Minister and state of disaster have the potential to disrupt the ways business is working with government on solving these problems now,” she adds.
South Africa needs to drive and complete the restructuring of Eskom and unbundle an independent system operator as the main step. The sooner that happens, the sooner the country will be on the path to dealing with the structural problems of its electricity sector, she states.
Mavuso says the first problem with the concept of an Electricity Minister is that it is unclear what legislative function such a Minister can perform. The responsibilities regarding Eskom and electricity policy are clearly assigned, namely the Public Enterprises Minister must exercise shareholder responsibilities and the Mineral Resources and Energy Minister must set electricity policy. These legislated responsibilities cannot be reassigned on a whim.
“The question I was left pondering was why the President is appointing a new Minister rather than putting people into the ministries currently endowed with the responsibilities to drive that restructuring? I appreciate the President’s view that the Minister will oversee the work of NECOM, but what is needed are Public Enterprises and Mineral Resources and Energy Ministers who will expeditiously drive through the work of the committee, not another minister,” Mavuso asserts.
Additionally, BLSA, together with business organisation Business Unity South Africa, wrote to the President to share their thoughts on the proposed upcoming Cabinet reshuffle, stating that: “Expectations of the Presidency can be overplayed, which is why we think it is important that accountability for delivery is shared by Cabinet as a whole”.
However, the appointment of an Electricity Minister within the Presidency clearly goes against this view, as yet more accountability is being shifted away from cabinet and into the Presidency.
“Perhaps the President has a clear plan and there is a positive role for such a Minister. I would welcome it. If there are clear deliverables and clear timeframes put to them, it could turn out to be positive.
“But the risk is that we create yet another centre of power in the effort to drive reform and change for the sector, including Eskom. Eskom’s leadership has to account to many stakeholders and a third minister does not seem to help the predicament the State-owned enterprise faces,” she points out.
Further, the state of disaster is similarly a move in which it is far from clear that it will be positive for the business environment. The state of disaster at the start of Covid-19 left citizens reeling from a lack of accountability, with widespread procurement fraud and gross violations of the rights of citizens. It also undermines the rule of law, potentially damaging business confidence, Mavuso says.
“How will this one be different? What is it that a state of disaster allows that cannot be done anyway? The President’s speech did not make that clear and, days later, there still had not been any regulations published in terms of the state of disaster, so we are none the wiser. I remain open to being convinced and, if it helps solve this crisis, I would welcome it.
“It is critical that guard rails be put in place to prevent the abuses we have seen in previous states of disaster. There are considerable risks that must be managed. But if, again, a plan is provided with clear timetables and deliverables, particularly for when the state of disaster will end, perhaps it will be of value.
“Organised business will be actively engaging with our counterparts in the Presidency to give them the opportunity to convince us. And, if they succeed, we will be enthusiastic partners,” she avers.