By Lehlohonolo Lehana.
Finance Minister Enoch Godongwana says government remains committed to resolve power utility Eskom issues as soon as possible.
Godongwana was speaking at the Pre-World Economic Forum (WEF) business breakfast held in Johannesburg on Thursday.
The World Economic Forum (WEF) is a Swiss non-profit foundation based in Geneva. It is best known for its Annual Meeting held in Davos, Switzerland, bringing together top business leaders, international political leaders, economists and other experts to discuss the world’s most pressing issues.
The recommitment by the government comes as South Africans have been subjected to daily blackouts since last year as Eskom struggles to generate enough capacity to provide electricity for all South Africans.
The country is currently on continuous stage 6 load shedding.
The struggling power utility has managed to reduce its debt and loan accounts from R401.8 billion in 2021 to R396.3 billion in the latest financial year.
Godognwana said the government will continue to support Eskom, to ensure it focuses on restoring the coal-fired power stations.
“A lot of work is being done, there is no doubt about that. We want to resolve the Eskom issue as soon as possible, part of that resolution is to make sure that they have a healthy balance sheet so that they should be able to do what they should do best, in my view, they should prioritise sorting what they have, not looking for what they don’t have, in making sure that the 48000 MW, at least 32000 MW are working, just something to sort this out.
“That is why it is critical for us to clear that balance sheet, we will make the appropriate announcement on the 22nd of February.”
Godongwana said the National Energy Regulator of South Africa’s decision on Eskom’s tariff increase application will determine how much of the debt government has to take over.
“We said during the Medium-Term Budget Policy Statement that there are a lot of variables that we must take into account when we take that debt, amongst those variables is what Nersa is going to announce today (Thursday), when Nersa announce the tariffs it will then explain to us Eskom’s cashflows moving forward and what are the implications, and that will also explain the quantum of the debt we need to take.”
Despite stating that the government is fast-tracking reforms to achieve energy security, amongst other things, load shedding persists as a blight on the country’s balance sheet.
Economic outlooks for the country have remained low alongside business confidence and investment, with continuous and intensifying rolling blackouts disrupting economic activity across the board.
Godongwana said the international and local challenges continue to pose as obstacles in the growth of the economy.
This as real Gross Domestic Product (GDP) grew by some 1.6% in the third quarter of 2022.
“The impact of the COVID-19 pandemic on employment and investment continue to have an impact on growth and warned that the ongoing war between Russia and Ukraine could have a devastating impact.”
The Minister urged the business people who will be part of South Africa’s delegation at the WEF to work with government to resolve the challenges facing the country.
“We have got to find a solution together. I’m saying that even as we go to Davos, we must begin to say how we work together on all of these things. All these areas I’ve mentioned, there should be a possibility that we could work together,” Godongwana said.