Defend Truth

ANALYSIS

Government’s PR optics control unravels as two key decisions reversed in a day

Government’s PR optics control unravels as two key decisions reversed in a day
Illustrative image | Sources: Finance Minister Enoch Godongwana. (Photo: Leila Dougan) | An Eskom regional office in the Braamfontein. (Photo: Leon Sadiki / Bloomberg via Getty Images) | (Photo: Waldo Swiegers / Bloomberg via Getty Images)

Failure to grasp political sensitivities around the corruption and financial malfeasance-wracked Eskom being exempted from reporting irregular spending and criminal conduct losses shows the government’s lack of capacity, inability to communicate and floundering strategic leadership. Ditto, on the electricity State of Disaster flip-flop.

All that’s being withdrawn is the current version of the Eskom exemption from reporting irregular, wasteful and fruitless expenditure and losses from criminal conduct in its audited financial statement. A new exemption will be reissued, after further consultations. 

“Yes, I am confirming the withdrawal. By [Thursday] we’ll have a Gazette withdrawing the current one. That I can confirm. The other confirmation is that we definitely will come back,” Finance Minister Enoch Godongwana on Wednesday told four finance-related parliamentary committees — but only after opposition MPs pressed for details of the so-called withdrawal.

This underscores the trend of fudgy government communication — seemingly hedged on factional winds of the governing ANC and political optics — abetted by ANC MPs. Routinely, ANC study groups are called for ministers, and sometimes also officials, to brief governing party legislators and to coordinate questions and approaches. This would definitely have happened on a matter that caused such public outcry as Eskom’s reporting exemption; the finance minister, and perhaps others, would have briefed MPs.

During Wednesday’s parliamentary committee session, ANC MP Thandi Tobias-Pokolo invoked Eskom’s status as a National Key Point, also directing the extent of information shared. Later, ANC MP Xolisile Qayiso interjected to call for an end to opposition questions on what the minister actually meant, saying the exemption was withdrawn “for now”.

And ultimately, the Standing Committee on Finance chairperson and ANC MP, Joe Maswanganyi, closed the meeting, saying the minister had decided to withdraw the exemption — and that’s it. 

“We are not going to qualify it by saying for now or for when… If ever there will be further engagement in the future, we will deal with that when we come to that,” said Maswanganyi. 

To Godongwana’s credit, he did clarify what he meant — signalling an updated, refined version was in the making after consultations with Auditor-General Tsakani Maluleke, who had raised concerns in what the finance minister described as “intense discussions” on Tuesday. 

Possibly consultations could also include Cosatu, the ANC alliance partner which had issued a scathing statement on how the National Treasury’s exemption was a new round of State Capture.

“This is an abominable decision devoid of any common sense, good governance or legal rationale. The federation rejects it with the utter contempt it deserves and demands its immediate cancellation,” the Cosatu statement said.

Key indicators of financial health

Irregular, wasteful and fruitless expenditure and losses due to criminal conduct, while not technically accounting tools, are part of institutional reporting under the Public Finance Management Act (PFMA). And these categories, considered by the AG, are key indicators of an institution’s financial health — and crucially an institution’s capacity to follow legislative and regulatory prescripts.

Shifting irregular, fruitless and criminal conduct losses from the financial statements that are independently audited to the annual report, effectively an entity’s PR statement about itself, is problematic. No independent oversight happens, like an audit or checks against PFMA, and details of misspending and steps to correct such are fudged.

Read more in Daily Maverick: Our Lady of Perpetual Exemption: Eskom’s latest saga alarms already bruised South Africa 

It was the point repeatedly made by opposition MPs, given Eskom’s track record of delayed annual report submission to Parliament, and qualified audit opinions since 2017, largely on the back of irregular expenditure and other (mis)spending.

And to Godongwana’s credit, he did accept that the timing and communication of this now-withdrawn Eskom reporting had been lacking, similar to the brouhaha that erupted over the changed procurement regulations.

“With hindsight, we should have said it is likely to happen, be preemptive in the communications. Even in this particular matter, we should have been pre-emptive in the consultative process… We are learning.”

Too slowly; it’s come at a significant reputational cost to the National Treasury, Eskom and the government at large.

The Eskom exemption debacle has highlighted how the government is out of touch and in a bubble. Steeped in that kowtowing culture of “Yes, minister, three bags full, minister”, governance lacks capacity and strategic leadership. Instead, the focus falls on controlling the optics — the Presidency is leading on that front, even if it damages constitutional institutions like Parliament and the Auditor-General.

But governance by PR events and making things look pretty is at best short-lived, at worst nonsense. The Eskom exemption, or balance sheet sanitising as opposition MPs on Wednesday called it, got bust by widespread sharp public criticism. 

End of State of Disaster

Litigation against the electricity State of Disaster by Outa (Organisation Undoing Tax Abuse) that the government sussed it would lose, finally led to the disaster declaration’s end.

As far back as mid-2022, the government and the Presidency were told in a legal opinion that this electricity State of Disaster would not carry. And when the government’s considerations of this emerged publicly, a host of legal scholars, analysts and others told the government South Africa had already in place all the necessary legislative and regulatory measures.

Instead, the electricity State of Disaster became the big presidential announcement, alongside a new electricity minister in the Presidency in February’s State of the Nation Address.

It was a quick fix taken with a twist of nostalgia for the Covid-19 State of Disaster in terms of which Cabinet gave itself immense powers — also to ban sales of open-toe shoes and grilled chicken — through regulations that do not come under parliamentary scrutiny and with bringing spooks, cops and soldiers into the centre of state decision-making through NatJoints (National Joint Operational and Intelligence Structure) — an entity that does not account publicly and is not established in law or regulation.

Read more in Daily Maverick: We’ve got the power: Government hangs on State of Disaster to keep control 

That an electricity State of Disaster was unnecessary, emerged already in March. Crucially, Godongwana made the Eskom reporting exemption under the Public Finance Management Act (PFMA), not the disaster regulations that were also eschewed by Environment Minister Barbara Creecy who used existing legislation to dismiss an appeal by Karpowership, which remains embroiled in litigation over emergency power provision.

That the ending of the electricity State of Disaster was not communicated by the government, but Outa, shows the government’s inability to properly, proactively and effectively communicate.

Outa released the State Law Adviser’s letter: “We are instructed that the Minister of Co-operative Governance and Traditional Affairs, in consultation with the relevant Cabinet members, has decided to terminate the state of disaster…”

The government’s televised briefing, styled as an “update” on the State of Disaster, had been scheduled a day earlier, and at the allotted time on Wednesday, two ministers and a deputy took to the speaker’s podium.  

They held the line of the statement issued after Outa’s statement and the briefing — a review found no need for extraordinary powers. It was only in question time that some sort of answers were given on the litigation. 

“On the basis of that review you don’t need extraordinary measures,” said Deputy Cooperative Governance Minister Parks Tau. “Of course, we looked at litigation. You ask yourself, if you don’t need a State of Disaster, do we need to be in court? If you don’t need the State of Disaster, you don’t then go and brief senior counsel…  

“On the basis of the current review, we do not need them [State of Disaster powers], so we don’t need to be in court. The point of the court becomes moot.”

The ministers got their broadcast time just as the MPs and National Treasury did earlier — important ahead of the 2024 elections — but answers on both fronts remained fudgy at best. 

While the debacle around Eskom’s irregular spending reporting exemption and the end of the electricity State of Disaster were front and centre on Wednesday, other shambles include the SABC board non-appointment. Here again, litigation has lifted the lid on governance shenanigans tantamount to political interference just seven years after a hard-hitting parliamentary inquiry into the SABC drew the line in the sand on such.

Strategic leadership, according to Henry Kissinger, the ex-US secretary of state and 1973 Nobel Peace Prize recipient, is necessary because without it “institutions drift, and nations court growing irrelevance, and, ultimately, disaster”.

In his book Leadership, Kissinger writes, “For strategies to inspire the society, leaders must serve as educators — communicating objectives, assuaging doubts and rallying support…”

A televised ministerial briefing, legislators’ concocted categorisation of a temporary withdrawal as the end of it, and the attitude of “minister — or President — knows best” is not delivering such capacity, communication and leadership.

This one Wednesday in April, the government was shown up as simply galumphing along. DM

Gallery

Comments - Please in order to comment.

  • Joe Soap says:

    The ANC does not have the required skills. Now they are trying to use legal manoeuvres to make things look pretty. Hopefully, the ANC will soon realise they don’t have the skills to make things look pretty through legal manoeuvres either. The ANC’s expertise lies in stealing.

  • Jane Crankshaw says:

    Every decision made by this current government is “ seemingly hedged on factional winds of the governing ANC and political optics – abetted by ANC MP’s”
    Even the discussions, ambitions, organisations, papers and laws dealing with corruption are themselves corrupt. One rotten apple can be blamed for the decay of the entire barrel. Isn’t that always the case!

  • owen steyn says:

    waka banana republic

  • Jon Quirk says:

    And what is now the policy at Transnet? Has that similarly been reversed, and is that SOE now subject to a proper and full audit?

  • Clodagh Seegers says:

    Excellent summing up of our having to witness yet another week of this bumbling, “bull in a china shop” government! Further damage to our country’s international reputation and value of our currency.

  • Soil Merchant says:

    I may be completely out on a limb here, but if the State of Disaster has been rescinded then surely there is no position, nor need for the Minister of Electricity ?

  • Rory Macnamara says:

    Hopefully our newly minted Deputy President will appreciate that the power does not rest with the majority in government but the people of this country. well done to all that with loud voice technically told the government to get knotted! The telling “withdrawn for now” is the last vestige of threat the ANC can muster showing their utter lack of appreciation for the voice of the people. These two debacles which left the government with more than egg on its face is a culmination of their ignorance, stupidity and arrogance we have had to live with for the last 30 years. perhaps the ANC and EFF for that matter can board a ship with pit latrines and head toward Russia and stay their with their BFF Putin.

    • Ashley Stone says:

      I found it quite interesting that the PP, currently in a competency hearing, disclosed she is learning Russian. Perhaps the comrade is hedging her bets and planning a long holiday at a newly built Dacha in Russia?

    • John Smythe says:

      Hopefully?? They don’t a rat’s about “the people of this country”. We all hoped Cyril would fix the mess. But he hasn’t. Never hope on anything ANC unless it’s to loot the coffers. It’s the only thing they’re good at.

  • Confucious Says says:

    Just how many times has this incompetent government made a completely ludicrous statement or actioned the most stupid requirements, only to reverse the call hours/days later. Why oh why can they not think before opening their mouths?! This must be one of the dumbest ruling parties anywhere!!!

  • Sydney Halliday says:

    I think this Eskom exemption would in any case have fallen foul of the Auditing Profession Act, which requires auditors to report a “reportable irregularity” to IRBA, and to note it in their auditor’s report, which forms part of the audited financial statements. This attempt to hide unfavourable information is a blemish on the good name of Treasury, but I suspect it was imposed on them from the top.

  • Alan Paterson says:

    I can only contribute a quote attributed to Ricky Gervais (he would have a field day here). “Remember, when you are dead you do not know you are dead. It is only painful for others. The same applies when you are stupid”. The ANC is, unfortunately, not dead so we must still suffer the pain..

    • John Smythe says:

      Excellent 😀

    • Frans Flippo says:

      Why are these buffoons getting 5 bar a year? It is completely disproportional to the value they are delivering to the nation. “We are still learning” — fine, but perhaps do that on your own account, not that of the taxpayers?

  • petroscali says:

    I am an eternal cynic when it comes to the complex lengths that the clown show will go to in order to line the cash up for themselves. I cannot help but think that this emergency debacle was put in place so that the Karpowski Power ships can circumvent due process, and in doing so allow for the Karpowski organization to pay Gwede and he can then go and retire.

  • John Strydom says:

    When the new “Minister of Electricity” visited 6 power stations only to declare that he found “no corruption” the helpless flailing and pretense of this government was clearly exposed.
    Let us hope that in the background some experts have been called in to help out at Eskom. Admitting anything like this might be happening is, of course, beyond these incompetents.

  • Malcolm Kent says:

    The ANC think ‘State Owned Enterprise’ means ‘ANC Owned Enterprise’ & eveything that has happened reinforces that view. In an Economist article July 2019 they said “the Russian version of state capitalism is a rent-seeking, productivity sapping licence for the clique that surrounds (Putin) to steal freely from the national coffers”. So why are we surprised that the ANC cosies up to Russia – that is the model they aspire to?

  • Blingtofling HD says:

    I have put my focus of this excellent article exposing yet another spectacular idiotic bunggling leadership, on how it was received by Godongwana who stood with egg on his face. Admitting to some of the less serious issues – lack of leadership communication. So … it was just an oversight. The irrationality because of the scrambling going on in ANC, really puts the lid on the level of competence and the frantic frenzy to conceal, regain control, and the smokescreens of good leadership for the benefit of their voters -who not always are able to grasp that propaganda can sound as credible as facts. They have finally gone too far. People have had enough. The overwhelming pressure from all quarters have had an impact. But don’t be celebrating success just yet. Just keep pushing forwards. We have a wiley and slippery common enemy. They are masters of corruption and concealment of incompetance.

    • Allan Wolman Wolman says:

      “People have had enough!” Really? If they have had enough they would be out there in the streets protesting as they did years ago when the had had enough of Zuma. Why no mass action across the country? Because the people expect it nothing shocks or surprises them any more. Everything is ‘normal’

  • Philip Armstrong says:

    All this seems to reflect in my view is a bumbling, inept President who simply is clueless and lacks any ability or willingness to lead and it shows through everything we keep having to endure on a daily basis.

  • Lisbeth Scalabrini says:

    There is a dire need for pragmatic leaders, who have a view of the entire picture and get to the end result considering all the consequences. They would not be in the present situation if at least some of them had a broader practical mind and did not stop halfway through. It would also be a good thing if the right hand knows what the left one is doing.

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