Eskom will be restructured into three separate entities – generation, transmission and distribution – under the Eskom umbrella. That would isolate costs and enable Eskom to raise funding on the markets – rather than the tightly stretched national purse and R350-billion in government guarantees – and from other funders.
“It is imperative that we undertake these measures without delay to stabilise Eskom’s finances, ensure security of electricity supply, and establish the basis for long-term sustainability,” Ramaphosa told the joint sitting of Parliament.
The announcement was widely expected, but that it was made showed the urgency needed to fix energy supply without which economic and social development would be undermined. Or as Ramaphosa put it bluntly: “Eskom is in crisis and the risks it poses to South Africa are great.”
And while in the past days it was business complaints about electricity prices that were in the public eye, the president said the decision to restructure Eskom was “informed by the need to minimise any adverse economic cost to the consumer and taxpayer”.
The news for cash-strapped South Africans was not clear though: Eskom would need “more revenue through an affordable tariff increase”, as it is moving to “significantly reduce” its costs. The government will continue to support Eskom’s balance sheet, without burdening the fiscus, but details were kicked to touch to the Budget on 20 February.
But Ramaphosa moved to stave off troubles on the labour front where ANC alliance partner Cosatu and trade unions like the National Metalworkers’ Union of South Africa (Numsa) had opposed such a move, and possible retrenchments. There would be consultation “to work out the details of a just transition, and proper, credible and sustainable plans that will address the needs of all those who may be affected”.
It’s not just Eskom that’s being restructured – the intelligence services will also be. Ramaphosa announced that the State Security Agency (SSA) would again be restructured into a domestic and foreign service, with the National Security Council, chaired by the president, being re-established. This was in order to “reconstitute a professional national intelligence capability” and to ensure the intelligence services “defend and protect the people of SA, and not any party-political official”.
Further announcements will follow, but these steps are based on the panel of experts Ramaphosa had appointed in 2018, and it’s a significant move to try to end the politicisation of the SSA and intelligence services, and to clean up.
This push for a professional intelligence service comes as Ramaphosa also highlighted the appointment of a new prosecutions boss, Advocate Shamila Batohi, and the process to appoint a new tax boss, like Batohi’s appointment, through an expert panel.
“Watch this space!” were Ramaphosa’s words. These appointments are part of his administration’s drive to re-institute integrity into these institutions, including the police.
“We have therefore acted to stabilise and restore the credibility of institutions like the National Prosecuting Authority, the South African Revenue Service, the State Security Agency and the South African Police Service.”
It’s one promise stated in his maiden 2018 SONA achieved, alongside what the president described as “significant progress” in certainty on mining regulation and the visa regime, mobile spectrum allocation, and reviewing port, rail and electricity prices.
As is the Zondo State Capture Commission, where revelations are “deeply disturbing, for they reveal a breadth and depth of criminal wrongdoing that challenges the very foundation of our democratic state”. Ramaphosa pledged that “stolen money” must be recovered “urgently” and prosecutions must follow swiftly, while the commission must be allowed to do its work without hindrance but with assistance from all those who can help. To boost this, the announcement of the special directorate in the prosecution services effectively re-established the Scorpions.
Ramaphosa answered his critics by highlighting the investment and jobs summits – “If fully implemented (the job summit pledges) will double the number of jobs created in our economy” – while leadership and governance changes have restored confidence in these strategic institutions. Land reform would be speeded up in terms of the rule of law, and worries about policy uncertainty were also addressed.
“We have addressed these concerns and we continue to engage those who raise concerns of our policy direction. Our efforts are uneven and much work needs still to be done,” said Ramaphosa, highlighting the need for “shared determination to work together” to focus efforts on inclusive economic growth and jobs.
For 2019 Ramaphosa identified five tasks for collective action.
“We must accelerate inclusive economic growth and create jobs. Secondly, our history demands that we should improve the education system and develop the skills that we need now and into the future. Thirdly, we are duty-bound to improve the conditions of life for all South Africans, especially the poor. Fourthly, we have no choice but to step up the fight against corruption and State Capture. Fifthly, we need to strengthen the capacity of the state to address the needs of the people.”
There were nods to business, there were nods to workers and to constituents like battered women and farmers. The National Health Insurance (NHI) that the governing ANC alliance partners, Cosatu and the South African Communist Party (SACP), are dead set on was a sales pitch – private medical care and others are opposed due to the high costs of such an NHI. But there was no way around it to ensure equitable access to quality healthcare – only 16% of South Africans have private medical cover.
“By applying the principle of social solidarity and cross-subsidisation (as it’s done globally), we aim to reduce inequality in access to healthcare,” emphasised Ramaphosa, adding that there’s now a war room on the NHI in the presidency.
The nub of Ramaphosa’s announcements on measures to kick off inclusive economic growth is in this statement, fairly well into the SONA, that brings it all together:
“At the centre of all our efforts to achieve higher and more equitable growth, to draw young people into employment and to prepare our country for the digital age, must be the prioritisation of education and the development of skills.”
It wasn’t just about the hard-nosed economics, although that was the majority of Ramaphosa’s speech, there was the fuzzy feelgood factor also. After all, 2019 is a big year – elections, but also the 25thyear of the 1994 transition to democracy.
“We will celebrate the triumph of freedom over subjugation, the triumph of democracy over racial tyranny, the triumph of hope over despair. We will celebrate the irresistible determination of an oppressed people to be free and equal and fulfilled.”
But difficult questions also needed to be asked, whether the society envisioned in 1994 in which all South Africans enjoyed rights.
“We must use this time to reflect on the progress we have made, the challenges we have encountered, the setbacks we have suffered, and the mistakes we have committed.”
It was about putting shoulders to the wheel – together. It’s been a tough road to freedom, but one that must continue.
“But we will not surrender to the forces of pessimism and defeatism. Our society is anchored in the roots of tolerance and co-existence, and we stand firm, resolute and united against all and everything that seeks to divide us or destroy our hard-won gains.”
The task may be formidable, but despite challenges South Africa has always been driven by optimism.
“This task of building a better South Africa is our collective task as a nation, as the people of South Africa,” said Ramaphosa after putting the economy at the centre of this drive.
“Let us continue to embrace the spirit of citizen activism in line with the injunction, Thuma Mina, in the onward march towards equality, freedom and prosperity for all.” DM
"Lord make me chaste, but not yet" ~ Saint Augustine