By Lehlohonolo Lehana.
Power utility Eskom has again taken centre stage at a time when South Africa can ill afford blackouts at increasing regularity, and for longer periods of the day – while strike action is also unwelcome amid growing global economic concerns and rising inflation.
Russia’s invasion of Ukraine has magnified the slowdown in the global economy, which is entering what could become a protracted period of feeble growth and elevated inflation, according to the World Bank’s latest Global Economic Prospects report. This raises the risk of ‘stagflation’, with potentially harmful consequences for middle- and low-income economies alike.
“The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid,” said World Bank president David Malpass.
In South Africa, Business Unity SA (BUSA) on Wednesday (29 June) noted with grave concern Eskom’s move to stage 6 load shedding.
The implementation of stage 6 load shedding is a serious blow to an economy that is already struggling with low growth and a lack of decisive action on the part of the government to make the necessary interventions to attract investment and put the country on a sustainable and inclusive growth path,” said Cas Coovadia, Business Unity SA CEO.
“The implementation of stage 6 load shedding will be a serious blow to all sectors of the economy and could lead to small and medium businesses buckling under the pressure of managing an untenable situation. We must stress that while this is a serious and negative impact on the economy, we are, unfortunately, not surprised that we have reached this crisis situation,” he said.
“We have been urging the government for numerous years to remove all barriers to private sector intervention in the generation of energy and power, but it is only recently that the government has heeded these considerations. We welcome the number of embedded energy projects that have been authorised by NERSA and progress on the current bid window for renewables, but these now must be the norm rather than the exception, “Coovadia said.
BUSA also expressed concern over the unprotected wage strike at the power utility.
We now urge the government to do whatever is necessary to enable Eskom to move away from high levels of load shedding as a matter of urgency, to deal decisively with reported acts of sabotage at Eskom by enabling law and order agencies to act with urgency to bring those responsible for such sabotage to book and to remove any remaining barriers to private sector generation of power and getting renewables onto the grid as quickly as possible.”
Eskom said workers are returning to their posts, without any signs of unrest, following a meeting between the company and labour groups, the power utility said.
Protests started after wage negotiations stalled earlier this week, as roads to power plants were blocked and petrol bombs were thrown at the homes of managers, resulting in the worst electricity shortages since 2019. Unions asked workers to “give the process of negotiations a chance” after resuming discussions with Eskom over a wage offer.
Many employees are peacefully returning to work and there are no incidents of protest reported so far today,” spokesperson Sikonathi Mantshantsha said. “The details of any wage offer will be made known on Friday when the wage negotiations resume.”
The National Union of Mineworkers and National Union of Metalworkers of South Africa said in a statement late Tuesday that meetings with the company made “considerable progress in that negotiations have been able to break new ground with a new offer.”
The Presidency meanwhile said President Cyril Ramaphosa returned to the country from the G7 summit in Germany on Tuesday morning. He was immediately roped into a briefing about ongoing labour disputes at Eskom, which resulted in the country being plunged into darkness.
The president expressed concern about the situation and called for law enforcement to deal with incidents of sabotage at power stations across the country.
“He was assured that the illegal strike would be resolved expeditiously,” Presidency said.
Cabinet spokesperson Phumla Williams said that an extended Cabinet meeting had not been scheduled for Wednesday but did not go into detail on whether a Cabinet committee was meeting.
Thousands of Eskom workers at nine power stations and other operating facilities downed tools more than a week ago following a deadlock in wage negotiations on 22 June.
This wildcat strike, combined with unplanned breakdowns, plunged the country into stage 6 load shedding for the second time in the history of rotational power cuts.
Eskom confirmed that a number of its striking workers returned to their posts on Wednesday while wage negotiations would continue, a move that could restore the utility’s generation capacity.