Ramaphosa is leaving out this key player in the energy crisis

 ·13 Feb 2023

Although President Cyril Ramaphosa has outlined broad initiatives to tackle South Africa’s crippling energy crisis – big business is being left out.

Busi Mavuso, the CEO of Business Leadership South Africa (BLSA) says that neither of the two interventions from Ramaphosa’s latest State of the Nation Address (SONA) regarding the energy crisis provided a clear opportunity for businesses to partner.

On Thursday, 9 January, during SONA, the president declared that there would be the appointment of a new ‘minister of electricity’ and that the Eskom crisis was an official national state of disaster.

Mavuso said that both new directives could potentially disrupt the ways business is working with the government on solving current problems.

According to the CEO, with regard to the new minister, it is unclear what legislative function they could perform.

“The responsibilities regarding Eskom and electricity policy are clearly assigned – the minister of public enterprises must exercise shareholder responsibilities, and the minister of mineral resources and energy must set the electricity policy,” said Mavuso.

“These legislated responsibilities cannot be reassigned on a whim.”

Business already plays a key role in the functioning of Eskom by supporting the National Electricity Crisis Committee (NECOM).

Mavuso said that a better approach would be to continue the drive to restructure Eskom, with the main step being the unbundling of an independent system operator.

“The sooner that happens, the sooner we will be on the path to dealing with the structural problems of our electricity sector,” said Mavuso.

“I appreciate the president’s view that the minister will oversee the work of NECOM, but in fact, what is needed are ministers in public enterprises and minerals and energy who will expeditiously drive through the work of the committee, not another minister,” said Mavuso.

She added that more accountability is being shifted away from the cabinet to the presidency through moves similar to this.

“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,” said the CEO.

She said that, similar to the appointment of a new minister, the declaration of a national state of disaster does not seem to have a clear positive outcome for the business environment.

It can potentially damage business confidence through widespread procurement fraud.

“How will this (state of disaster) 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,” said Mavuso.

“Organised businesses 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.”

BLSA is an organised body representing the interests of businesses and the private sector in South Africa. Mavuso herself has been closely engaged with Eskom as an ex-board member.

Read: The cheapest business accounts from South Africa’s top banks

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