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


Dr Roland Ngam is programme manager for climate justice and socioecological transformation at the Rosa Luxemburg Foundation Southern Africa. Views expressed are not necessarily those of the Rosa Luxemburg Foundation.

Perhaps the second-biggest transformation that can quickly lift the mood in this country after fixing Eskom, is investment into the rural economy. Rural towns have been bleeding jobs for years.

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

First, they can invest in “popular share options” – if the government creates them! – to build new power plants in the same manner that ordinary Egyptians helped to redevelop the Suez Canal in a recent example.

Read in Daily Maverick:Europe’s quest for energy sources is fuelling poverty and green colonialism in Africa

When Egypt wanted to expand the Suez Canal a few years ago, the International Monetary Fund rejected its loan application. President Abdel Fattah El-Sisi turned to the Egyptian people and they delivered more money than anyone had expected. Women sold their jewellery. Some people worked extra shifts. Everybody participated, a few Egyptian pounds here and so on. The Egyptian government raised $8.4-billion from the sale of investment certificates to its citizens… in just eight days!

Too often, we undervalue these commoning, cooperative solutions that are right under our noses.

We should not always run to big business for everything. Big interests already own 95% of South Africa’s wealth and they are licking their lips at the prospect of Eskom being privatised. If that happens then we can wave goodbye to South Africa’s developmental agenda.

Ramaphosa has also spoken a lot about adopting regulation for more rooftop solar to supply excess electricity to the grid. Every kilowatt-hour counts.

However, it is only a few rich homeowners who can really participate in such a prosumer plan now. In a recent letter to the nation he announced: “Another major source of new generating capacity are solar panels on the roofs of houses and businesses. Work will soon be completed on a pricing structure that will allow customers to sell surplus electricity from rooftop solar panels into the grid.”

What he did not say was that this cohort he was talking about are people who are already fairly comfortable, people who encounter rolling blackouts only when they are driving somewhere.

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The second thing that should be done to improve electricity access quickly is to urgently expand the base of homes and communities that own solar generation capacity and this can only happen if the government offers people subsidies.

If you give R100,000 in subsidies to 10,000 families, for example, and ask them to top up the rest, that is a R1-billion spend that goes directly into boosting consumer spending, the better-education agenda, wealth within the middle class, small businesses, etc.

Read in Daily Maverick:Rolling blackouts — now is the time for all good mayors and premiers to come to the aid of the country

If provincial governments are willing to participate, we can easily help tens of thousands of communities and households every year for a specific period until Eskom’s challenges are resolved.

I need to stress that advancing the country’s renewables agenda does not in any way mean that we are calling on the government to shut down its baseload capacity immediately. Any government that does such a thing is stupid.

Think rural

To my second point. Perhaps the second-biggest transformation that can quickly lift the mood in this country is investment into the rural economy. Rural towns have been bleeding jobs for years. The drought of the 2010s took away many jobs. As the weather situation improved, Covid-19 came and decimated the tourism sector.

By some estimates, about three million South Africans lost their jobs as a result of the Covid-19 pandemic in 2020, with women most affected. In 2022, as things improved, two million people were still out of work.

The tourism industry was hit hardest. The sector lost about one million jobs and inbound visitors dropped from 10.2 million international overnight visitors in 2019 to 3.3 million (a 70% drop) in 2020. In 2022, there were only 497,000 international arrivals during the first half of the year, compared with 1.1 million in 2019.

Why is this important? If you live in a small town like Postmasburg, Cullinan, Emalahleni, Graaff-Reinet or Pilgrim’s Rest, your entire existence depends on local businesses such as farms, hotels and mines. You have no land where you can grow vegetables to supplement what you buy from supermarkets.

If you work on a farm or prepare rooms in a hotel, what are you to do if the tourists are not coming? People in that income bracket do not save because there is nothing to save. Millions of people in small towns have been sitting at home, praying, waiting. They need land. They need jobs.  

Too often, nobody talks about them in the media because we are all focused on Eskom and Ramaphosa. We give provincial premiers a pass. We give mayors a pass. When Ramaphosa starts naming commissions at the Presidency because we want only him to fix everything, then we complain that there are too many commissions sitting in the Presidency.

Anyway! That is my big hope for #SONA23: lean on ordinary South Africans to fix Eskom and invest like never before in rural economies, Mr President, premiers and mayors! DM


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