South Africa's battered brand

William Saunderson-Meyer writes on our Eskom calamity, and the ANC policies that caused it


It’s an aeon’s old human characteristic. 

No matter what harsh experience has taught us, at the beginning of each new season, each new year, and each new life, we appear to be neurologically programmed to allow ourselves to hope. How would we otherwise survive as a species? Without that regular replenishment of optimism levels, we’d just sink deeper and deeper into the slough of despair. Eventually, mankind would simply give up, to slither unchecked and unlamented down the plug hole of the Universe. 

So, as a shell-shocked South Africa stumbles into 2023, it’s important not to allow what was a horrendous 2022 to cloud our expectations. On the other hand, there’s no point either in being a deliberately deluded Pollyanna. 

A wryly telling indication of the seriousness of our situation is what BrandSA, the country’s official marketing agency, touts as “South Africa’s most notable moments of 2022”. The best they could come up with for what was once the jewel of the African continent was: the repealing of Covid-19 rules; the government’s Just Energy Transition, which is dependent on the West coughing up R1.5 trillion in grants and soft loans; the appointment of Mandisa Maya as the first female Deputy Chief Justice; and the coronation of the Zulu king. ___STEADY_PAYWALL___

They inexplicably omitted my dear Aunt Hester at long last getting a new set of false teeth.

In its defence, BrandSA didn’t have much to work with. The country has over recent years been battered by such an avalanche of crises that it has become difficult to find credible grounds for optimism, at least in the short- to medium-term of one to five years. And the worst factors in South Africa’s straitened circumstances are all phenomena that have a dauntingly downward momentum. They are unlikely to improve soon, unless President Cyril Ramaphosa’s government miraculously becomes focused and effective.

However, a frightening new low in our prospects is this week’s news that police are investigating an alleged attempt in December to poison with cyanide-laced coffee the chief executive of Eskom. André de Ruyter, who put the rooting out of deeply embedded corruption and patronage networks at the heart of his Herculean challenge to turn around the power utility, had just the day before thrown in the towel and resigned.

De Ruyter, who upon his appointment in 2020 became the 10th CEO in six years, had cited a lack of political support as the reason for his resignation. His undermining had been led by Gwede Mantashe, Minister of Mineral Resources and Energy, in concert with thinly veiled racist attacks by black business forums and the unions.

Mantashe accused De Ruyter of “actively agitating for the overthrow of the state” through load shedding. Load shedding, said Mantashe, was “worse than state capture” and De Ruyter acted “too much like a policeman” in his attempts to end corruption at the utility.

Pravin Gordhan, Minister of Public Enterprises, under whose department Eskom falls, shamefully uttered not a word in defence of De Ruyter. Nor did Ramaphosa, who is dependent on Mantashe’s support for his own political survival.

Their cowardice is breath-taking, given the importance of the utility in the South African equation. Were one to imagine a Catastrophe Risk Index for the country, the health of Eskom would be a key measure.

The price of 29 years of inept, misguided and criminal African National Congress government is plain to see. The wreckage is strewn all around. But there is nothing better than the implosion of Eskom to serve as a case study of national decline, since the utility affects every person’s life and its travails have consequently been exhaustively documented. 

Almost every South African is by now familiar with the backstory of how in Eskom the three aspects of ANC governance mentioned above — incompetence, ideological delusion and moral turpitude — have intertwined and reinforced one another. But it bears brief repetition.

In 1998 the ANC passed the 1998 Eskom Amendment Act, allowing it extensive power to interfere in the running of the utility. It rejected Eskom’s projections of the need for additional generational capacity, formulated during the closing years of National Party rule, and refused to allow it to build new stations.

In 2008, the phrase “load shedding” — which apparently sounds better to the apparatchiks than “rolling blackouts” — entered the South African lexicon. Eskom was also instructed to implement a ferociously rigid affirmative action policy to get rid of white engineers. The technical core of the utility was hollowed out and institutional memory was destroyed.

Longstanding and tested supply and maintenance contracts were replaced with tenders going to the politically connected ANC elite. Because of the dishonesty of the tenderpreneur intermediaries, the prices of all inputs soared while quality and reliability plummeted. 

Eskom now produces less electricity than it did in 2006 but has 15,000 more employees than it had then. The situation is aggravated by the ANC's reluctance, for political reasons, to allow Eskom to pursue debt defaulters aggressively. Municipalities owe Eskom more than R50 billion for services and residents owe municipalities more than R140 billion.

In 2007, two new station builds, Medupi and Kusile, were belatedly started — not only to improve generational capacity but also to serve as convenient milch cows to fund the ANC’s depleted party coffers and provide a sinecure for its union allies. The two stations are unlikely to be fully operational before 2023 and 2026, at more than double the original budget of R160 billion.

In 2017, disgraced former president Jacob Zuma signed an unaffordable R1 trillion nuclear power deal with Russia that was eventually nixed by the Constitutional Court as illegal. Aside from the usual murky kickbacks and contracts for those blessed by the ANC, the party reportedly benefited directly with a R100 million Russian contribution to its 2014 general election campaign.

And the political conniving continues to this day. As mandated by the ANC leadership conference, which last month endorsed Ramaphosa for a second term by a substantial margin, control of Eskom is to pass from Gordhan’s department to Mantashe. It is a move contrary to the advice of virtually every energy expert.

Mantashe — of whom the Zondo Commission into State Capture stated that there was a “reasonable prospect” of a successful prosecution for corruption — has close ties to the coal mining sector and has impeded every attempt made to supplement Eskom’s capacity with renewables. Mantashe is also an enthusiastic proponent of a R200 billion deal with Turkey’s Karpowership, which uses offshore vessels to produce electricity using liquefied natural gas. There have been claims, strenuously denied, that ANC politicians and relatives of Mantashe have a beneficial interest in Karpowership SA.

Last week, the internationally influential Financial Times wrote that Eskom was “a study in miniature” of what had gone wrong with South Africa. De Ruyter’s job had been “made untenable” because he challenged “the entrenched position of coal [that] has been solidified by outright criminality”.

The “insane” decisions made regarding Eskom showed that Ramaphosa’s administration, “far from addressing the problem, seems bent on prolonging it”. Also, “it is not clear that the ANC has the stomach to do what is right… 

“There are some good people still in the party of Nelson Mandela. But they are drowning in the swamp that will eventually swallow them all.”

As 2023 kicks off in earnest, finding not losing hope is possibly the greatest challenge for us ordinary South Africans. What remains to be seen is whether Ramaphosa is one of those “good people” that the FT — which historically has championed the cause of South Africa as an investment destination and the ANC’s ability to secure its future — believes still populate the governing party. 

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