In the dark again, stuck in a time warp
Public enterprises minister Pravin Gordhan has moved to assure the public that Eskom is working to fix the current power outages and that there will be no dark Christmas.
While it is difficult to give assurances as it is unclear when the next break in the system will be, Gordhan says, the government and Eskom will go all out to ensure the lights stay on over the festive period. Towards that end, all Eskom managers have been ordered to cancel their holiday leave.
One glimmer of hope comes from the fact that halfway through December demand usually levels off.
“Between 15 December and 15 January, there is a lower demand in any case because of the shutdown of industry, and no load-shedding should be expected during that period,” said Gordhan.
No, you didn’t miss a media conference by the minister and Eskom chair Jabu Mabuza last week. The above was from December 6 2018. So the return of load-shedding and national depression late last week could not have been better (or worse) timed even if the government and Eskom had tried.
It makes one doubt that the Eskom nightmare will ever end and spreads fear for our economic prospects.
The media release Eskom put out at the weekend about how it is giving a boost to small businesses wasn’t reassuring either its timing was extremely unfortunate.
And after we return from the Christmas holiday, another momentous Eskom-related anniversary will be approaching. January 20 2020 will mark two years since Eskom unveiled a new board, a development that then deputy president Cyril Ramaphosa speaking in his capacity as chair of the interministerial committee on the reform of state-owned enterprises said would “restore the important contribution Eskom makes to our economy”.
It’s hard to accept that almost two years have passed and Eskom is still making the same contribution to the economy. Except that it’s not the type of contribution we would like to see, or need.
Even before I realised the anniversary of Gordhan’s media conference in 2018 and the promise of no load-shedding before Christmas (2018) was being marked with another round of darkness, I was feeling down about the prospects for 2020, having read an article in these pages by Busisiwe Mavuso, CEO of Business Leadership SA, who has been a little more than outspoken about some of the government’s unhelpful interventions on Eskom.
Mavuso, who is also a nonexecutive board member at Eskom, said the dismal 0.6% contraction in GDP in the third quarter should act as a wake-up call and reminder of where we are, after the “buoyant political responses” to the secondquarter growth of 3.2%.
The depressing part was her pointing out that the priorquarter performance came off a low base and represented “a return to normal” after the disastrous previous three months, which were defined by the return of load-shedding.
And as she was writing this, the lights were going off again. It doesn’t look like the “new normal” will involve a consistent availability of electricity.
Even before the latest round of power cuts it looked as though SA would struggle to get positive economic growth for the year, let alone the 0.5% the Reserve Bank and the Treasury are predicting itself a huge revision from what was predicted earlier in 2019 as the fourth quarter is already turning out to be weak.
As for the start of 2020, we had better hope we don’t see another strike such as the Association of Mineworkers and Construction Union stoppage at Sibanye-Stillwater, which, with Eskom blackouts, pushed us to that 3.1% contraction in the first quarter of 2019.
As we can’t depend on any assurances that Eskom may give about the possibility or extent of any power cuts in the short term due to the history of miscommunication over the past few years placing a bet on what the first quarter will look like would not be advisable.
BLEAK PROSPECTS
Just more than a week ago, at the unveiling of its interim results, the utility said it had no plans to implement loadshedding in the next months. I did check, twice, to ensure I got the correct year. And each time the unhappy confirmation was that the date was indeed November 28 2019.
With our own prospects looking bleak, news from further afield isn’t encouraging either. Germany, one of our biggest trading partners, is in the doldrums, enduring its steepest industrial slowdown in a decade. It barely managed to avoid a recession, rescued only by consumer spending.
The UK will be holding yet another election this week as it seeks to finally end its Brexit impasse, three-and-a-half years after it voted to leave the EU. Whatever the outcome on Thursday, it’s likely to mark another beginning, rather than the end, of yet more Brexit paralysis with uncertain consequences for the economy.
Eskom is thus shooting us in the foot just as it becomes clear that we can’t count on the outside world for a boost. Even if the rest of the world were booming, we would hardly be in a position to take advantage of it, with mining and manufacturing plants sitting idle because we can’t keep the lights on. That was the story of 2007, before the outbreak of the global financial crisis gave us something of an alibi, which we then used to ramp up government spending to unsustainable levels.
How long will the electricity nightmare last this time? We shouldn’t be looking to Eskom for answers.
THAT WAS THE STORY OF 2007, BEFORE THE GLOBAL FINANCIAL CRISIS GAVE US SOMETHING OF AN ALIBI