Privatising Eskom could lead to higher prices and more problems in the future Photo OUTA
South Africa – In 1994 South Africans of all races queued up at the voting stations and ushered in a new era for South Africa. With great hope in their hearts, they casted their votes and prayed for a better future. Fast forward to 2023 and the promise of a better future has been massively unfilled.
South Africa is on track to becoming a failed state or Zimbabwe 2.0. That is what many South Africans believe when they look at the current condition of the country. However, Dr Dale T. McKinley, International Political Economist, does not believe South Africa will reach that stage. While there are a whole range of issues plaguing the country, the country is far different from Zimbabwe or Venezuela.
“South Africa has a huge amount of fairly sophisticated industrial infrastructure. It is a very well developed economy. There is a large skills base here. The question , as far as I am concerned, and the fundamental issue is political will. It is political interference, entrepreneurship, it is messing around and putting people into positions they have no purpose of being there. It’s not a question of we are a failed state … The problem lies in political decision making, management of state owned enterprises.”
Zimbabwe is far from being a failed state
Zimbabwe gained their independence in 1980, 14 years before South Africa. When Zimbabwe is discussed, it is often referred to as a failed state and in a very negative light. According to Rutendo Matinyarare, Zimbabwean Anti-Sanctions Movement, the way Zimbabwe is perceived and spoken about is extremely false. The country is far from being a failed state.
“I differ with the characterisation of Zimbabwe being a failed state. When you look at simple metrics, the murder rate in South Africa is the highest in Africa. It is higher than Zimbabwe. The poverty rate is higher than that in Zimbabwe. We have a situation where 92% of the economy of South Africa is in the hands of whites and the other races whilst black people only control 7% of the economy. When you look at the GDP per capita, the South African black population, 55 million people, have a lower GDP per income than Zimbabwe.”
Furthermore, Zimbabwe has a lot more skills and they are actually being recruited into South Africa like so many others from other African nations, said Matinyarare. With all this in mind, Zimbabwe cannot be called a failed state and should not be looked at in that way.
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History is repeating itself
As the saying goes, those who do not learn from history are doomed to repeat its mistakes. The ANC are not just repeating but making new ones to fill many books. The National Party was extremely protective of the SOE’s and while there was a private sector, it was very limited. When it became clear to the British that the NP would not budge on their SOE’s, they made sure to remove them, explained Phapano Phasha, Anti-Poverty Forum.
“If you look at the ANC now and the Nationalist Party, when they started to be forceful and engage on issues of nationalisation and drive away the English private sector … When they started to drive them out of the SOE’s, that is when the British started looking for new partners. That’s when they started to invest in the black majority. They invested in political parties. What is interesting is if you look at the majority of the political parties pre 1994, they were actually funded by the British.”
The British used the political parties to drive out the NP because of its nationalistic policies. They are now making the ANC government, which allowed them space, to monopolise their SEO’s, said Phasha. It is just history repeating itself.
According to Phasha, the British invested in the “elite blacks” that currently reside at top levels of positions within the government. These politicians must now decide if they are ready to put the people first or continue to serve the British.
The face of corruption and evergreen contracts
Eskom is on its last legs and many, rightfully, blame corruption for this. To understand the corruption going on, we have to understand who makes money from Eskom. Many of the coal companies, banks and those who make machinery are all monopolised, said Matinyarare. The entire process to make electricity is monopolised, even down to the transporting of coal and other resources.
“Generally the resources that are needed in power generation is coal, initially, which is provided by only six companies all of which are not South African. They’re International companies and they’re white …You’ve got 85% of all coal being provided by these six companies. They are a monopoly. Then the other smaller companies that are providing are also white and only 4% of all coal, diesel and any other resources that are needed for the generation of electricity are actually coming from black companies.”
When the electricity generation process is mainly being provided by white companies, then the impression that Eskom is being overtaken by black people is completely false, said Matinyarare.
“Exxaro hasn’t been able to deliver some of its coal coaches same as Glencoe and same as other bigger companies. They have been hit by penalties by Eskom for not supplying quality coal, for not supplying on time and for not supplying the quotas. When they’ve been hit by these penalties, they don’t pay these penalties. They use their political links not to pay these penalties and they do not honour some of the agreements. This is problematic and that is corruption but it is not labelled as corruption. It is not publicised as corruption.”
Challenging and creating a better future
The NP knew privatisation was not going to create the future they wanted for their people. They knew in order to create a better country, basic services had to be nationalised. The current government needs to take this lesson from them if they wish to achieve a better future, said Matinyarare. The services South Africans need cannot be privatised.
“Why doesn’t the South African government today have laws to insist that if you are going to push us to privatise then your private companies, if they’re offering basic services, if they’re offering services that determine the future of the nation and the existence of the nation, they have to deliver national interest. They have to make sure that they deliver to every citizen and they have to make sure that they deliver in the interest of the nation. If they don’t, they must be nationalised. I think that’s where we have to go.”
To listen to Rutendo Matinyarare unpack the power act and the harms of privatising eskom, listen to the podcast here
