Glimmers of hope for South Africa: CEO

 ·16 Oct 2023

Despite extreme scepticism in South Africa, recent developments at SARS and census 2022 data from Stats SA point to some hopeful outcomes for the nation.

The 2022 Census from Stats SA released last week showed that basic services have become more accessible across the country, with access to electricity as the main source of energy for lighting at 95% (1996: 58%) and access to water at home at 82% (1996: 61%).

“These are good indicators of how far we’ve come as a country in improving the lives of our people. But I take this good news with a level of caution,” BLSA CEO Busisiwe Mavuso said.

“We are now at what could be an inflection point, and complacency is certainly not an option. The economy is struggling, and average per capita output has been shrinking for nearly a decade. Unemployment, particularly among the youth, has been worsening.”

“The performance of our state-owned enterprises has been a catastrophe, leading to the twin crises of electricity insecurity and the deterioration of our logistics system. Government revenue is lagging budgets leading to serious constraints on spending, increasing risks to the financial stability of the state.”

Despite these challenges, Mavuso noted the country still sees signs of success, such as SARS’s successful crackdown on an organised syndicate of coal smugglers, which cost the country over R500 million in load revenue.

SOE Plan

She added that the cost to Eskom – which suffered infrastructural damage to poor coal from this syndicate – may have been greater.

“Organised crime has been a disease at Eskom, driving sabotage, violence, and widespread theft of Eskom resources. SARS’s actions, while principally focused on recovering lost taxes, will have the effect of putting out of business the criminals who currently do so much harm to the utility,” she said.

“Indeed, our concern over the effect of criminal activity at the utility is what led us to provide financial support for the intelligence gathering efforts of the previous CEO.”

In addition, a huge financial issue for Eskom is the debt owed to it by municipalities, with the electricity minister saying last week that the embattled power utility is owed R64 billion.

That said, the Eskom Municipal Debt Relief Support Programme by the National Treasury could offer some relief, as it provides some ease as long as municipalities meet 14 conditions, including minimum collections and a ringfencing of Eskom.

The deadline to apply for the relief was extended to the end of October, as less than half of the municipalities representing the billions owed to Eskom had applied.

“However, it is only then that the hard work must begin – the scheme must not result in more damage to Eskom’s balance sheet – the write-offs must be balanced with funding from the government. To be sustainable, though, the national culture of non-payment must be turned around,” BLSA’s CEO added.

“Municipalities must step up collections, ensuring that they collect the revenue and then pay Eskom, and their residents need to pay. This will require a national effort.”

Additionally, there is hope for South Africa’s other problem child – Transnet, with a Roadmap for the Freight Logistics System sent to industry players for comment last week.

The document aims to reform the logistics sector by creating a regulated market for both public and private operators and hopes to turn around the utility’s problems at the nation’s ports and rails, which are impacting economic growth.

She said that the partnerships between business and the government have been bearing fruits, such as the nearly 6,000 MW of new generation added to the grid with more projects in the pipeline.

“Together with important regulatory reforms that are in parliament, I can see the light at the end of the tunnel for the electricity crisis. The logistics roadmap is an important guide that can enable similar progress in our logistics system.”

With crime remaining a serious issue in the country, she added that fast-tracking the National Prosecuting Authority Bill is crucial.

“The fruits of this work will enable the economy to turn its trajectory, generating jobs and the financial resources for the government to give people better lives. That will enable progress, ensuring that the next census shows further improvements rather than confirming an inflection point now.”

“That will enable progress, ensuring that the next census shows further improvements rather than confirming an inflection point now.”

Read: Huge salaries for South Africa’s ‘Big Four’ banking CEOs – earning up to R152,000 a day

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