Finance Minister Enoch Godongwana’s budget speech is expected to shed some light on how South Africans, as in government, plan to pay for Eskom’s massive debt.
Godongwana will deliver his Budget Speech on Wednesday afternoon amid what is believed to be Stage 7 rolling blackouts across the country.
Are we at Stage 7?
South Africa is officially at Stage 6 load shedding, but could technically be on Stage 7. On Tuesday, the utility’s spokesperson Sikonathi Mantshantsha announced that the utility had cut 7,045 megawatts from the grid. This translates to Stage 7 load shedding, but the utility has made no announcements about the upgrade in load shedding stages by Wednesday morning.
Evening Peak Feedback 21/02/2023, 19:15
Total demand: 30 480MW
Loadshedding: 7 045MW
Eskom OCGT’s Utilised: 14
Eskom GT’s Utilised: 3
IPP OCGT’s: 5
Renewable Gen: 1 262MW (Wind 791MW, CSP 390MW, PV 81MW)@Eskom_SA Available Generation: 23 289MW@EskomSpokesper1
— SikonathiMantshantsh (@SikonathiM) February 21, 2023
Mantashe’s Eskom takeover
Meanwhile, at a special ANC NEC meeting at Luthuli House, President Cyril Ramaphosa confirmed that Eskom is migrating from the Department of Public Enterprises to the Department of Minerals and Energy headed by Minister Gwede Mantashe, reports Scrolla.Africa.
Eskom’s debt = SA’s debt
President Cyril Ramaphosa announced at the State of the Nation Address last week the government’s plans to lighten the country’s load-shedding blues. Part of the debt is expected to be transferred to the government’s balance sheet. Godongwana is expected to give details on how it intends to absorb Eskom’s R400-billion ($22 billion) debt.
13 out of 17 of the economists surveyed by Bloomberg believe government can absorb at least half of the state utility’s debt without denting efforts to reduce state debt and its budget deficits. The figures announced by Godongwana will become added to the government’s R5 trillion debt and the repayment costs that consume about 18% of its budget.
“Eskom remains a chokepoint for the South African economy. In addition, the breakdown in the country’s transport and logistics infrastructure – the rail network and ports in particular – is driving up the costs of production. These costs are then passed on to consumers, resulting in higher prices at the till,” says David Ansara, Chief Executive of the Free Market Foundation. So, South Africans will ultimately be the ones to pay for Eskom’s mess, especially now that it has us held hostage in darkness.
Godongwana’s Budget plans are expected to boost SA’s power supplier in its efforts to alleviate ongoing load shedding.
South Africa has had load shedding every day in 2023 and the country is expected to venture further into darkness from Stage 6 to a possible Stage 7 or, worse, Stage 8.
If all goes well, Godongwana’s plans could get Eskom the funds it needs to boost its infrastructure.
This, we hope, will put an end to the weekly ‘Due to the breakdowns of the latest generation units…[Stage whatever] will be implemented continuously until further notice’.