Along with the bad news, Tito, give us some hope
Nothing reminds us more sharply of what a mess Eskom is in than rolling blackouts, or what the power utility euphemistically calls “loadshedding”. This month Eskom declared stage 2 load-shedding due to various problems, including a broken conveyor belt at Medupi. Panic set in after 18 months of grid stability had given us a false sense of security. Questions were asked about the state of Eskom. How far is the process of appointing a permanent CEO? Where are we when it comes to breaking the behemoth up into separate entities — generation, transmission and distribution? How long will Eskom’s massive R450bn debt continue being a burden on the fiscus and a risk to our sovereign credit rating?
Hopefully, these and other questions about the state of the economy will be answered when finance minister Tito Mboweni delivers the medium-term budget policy statement in parliament on Wednesday. This is an important policy statement that offers the National Treasury an opportunity to share its assessment of the economic climate and its views on the future.
We are not expecting good news from Mboweni. The most optimistic growth forecast is 0.6%, the budget deficit is edging closer to 7%, the debt-to-GDP ratio is approaching the unthinkable 70% mark and borrowing costs are shooting up. In fact, the state is borrowing just to pay interest. Revenue collection targets will not be achieved and junk status is around the corner.
Mboweni, who just gifted Eskom a R59bn rescue package, must tell the country what he and his cabinet colleagues are doing to resuscitate an entity that is the biggest security risk to the country. He must tell us what they are doing to bring us back from the edge of the fiscal abyss. He must also explain what he’s going to do to rein in the public sector wage bill, which has also been flagged by rating agencies as a major fiscal risk.
Tough decisions must be taken if this economy is to be brought back to life. We have long identified the problems and can generally agree on the remedies. The time for talking and planning is over; implementation is long overdue.