The apparent ideological confusion within the South African government will have a disastrous impact on Eskom and the country’s economy at large, according to economist Dawie Roodt.
The South African economy is in very deep trouble. In the second quarter, the economy actually contracted smaller than it was before Covid. With this huge load shedding that we are experiencing, the economy will be affected again – Dawie Roodt, economist.
Roodt explained the government’s inability to implement policies inline with its purported leftist stance means the economy will continue to slip. The energy crisis is another reason for the economy’s woes.
He stated an apparent ideological confusion and incapability of the state to reign in its failures at SOEs could, ironically, herald more privatisation.
Although the ruling African National Congress (ANC) identifies as a centre-left party, Roodt alleged that many of its members “aren’t real socialists.”
“We have a government that is actually a destructive force at various levels. The government is theoretically left-leaning, [but] any of the people in the ANC aren’t real socialists. This is bad for the economy because the implementation of the wrong ideology is disastrous to the economy,” he said.
He pointed to South African Airways (SAA) and the Post Office, among SOEs, as examples of what could happen to Eskom as a result of inconsistent ideological policies.
Roodt warned that the state’s apparent incapacity to deal with the energy crisis would lead to privatisation in the sector. Eskom is presently the country’s largest power utility.
“Gradually, the state is simply running out of money. Because they’re not capable of doing this, they will gradually be forced out of the electricity market and the private sector will take over. In a weird kind of way, we have a left-leaning government that is actually privatising everything in the country.”
Last week, President Cyril Ramaphosa and his Cabinet deliberated on the energy crisis as Eskom implemented Stage 6 loadshedding. A subsequent statement indicated that further pronouncements will be made in due course.
As of Saturday (September 24), Stage 3 load shedding will be implemented between 00:00 and 16:00 until Thursday (September 29). Stage 4 load shedding will be implemented daily during the evening peaks from 16:00 until 00:00.
“Eskom is still experiencing constraints from its diesel suppliers that is affecting the availability of bulk diesel to the Ankerlig and Gourikwa Open Cycle Gas Turbines, which have a combined capacity of 2 000MW,” said Eskom in a statement released on Saturday.
“While we expect diesel deliveries from Tuesday onwards, should this uncertainty of supply persist, higher stages of load shedding may be required.”
The power utility is expected to provide an update on Wednesday afternoon, or as soon as there are any significant changes.