Ramaphosa cancels Davos trip amid South Africa energy crisis
Cyril Ramaphosa has cancelled his trip to the World Economic Forum in Switzerland as South Africa grapples with an unprecedented energy crisis that has resulted in daily power cuts of between eight and 11 hours across the country.
Anger is growing as offices, hospitals, factories and tens of thousands of small businesses are forced to close, with outages also causing increased crime, traffic disruption and massive wastage as food supply chains collapse.
Protesters in the east of the commercial capital, Johannesburg, blocked roads with burning tyres on Monday, while a newspaper in the township of Soweto ran the headline “Unplugged” on its front page and listed dozens of local businesses that were struggling.
Eskom, South Africa’s power generation utility, has apologised to consumers but given no indication of when more energy will be restored to the national grid.
The power crisis in Africa’s most industrialised economy has been intensifying for several years. Analysts blame the shortfall on a failure to invest in an ageing fleet of largely coal-fuelled power stations, a lack of skilled staff and corruption.
Vincent Magwenya, the president’s spokesperson, said Ramaphosa acknowledged “the frustration of households, parents and learners who have commenced the school calendar year facing power shortages”.
Ramaphosa was due to fly to Davos on Monday with a high-powered delegation in an effort to attract foreign investment. He would now attend a series of meetings devoted to resolving the energy crisis instead, Magwenya said.
The South African rand slumped on Monday as investor concerns mounted.
There appears little prospect of immediate relief from the crisis. Some additional power may be imported from neighbouring countries but the emergency use of diesel-fuelled generators will only be possible if massive funds are released to Eskom.
Other changes identified as necessary by experts and officials, including an increased use of renewable power sources, will take years to have a significant effect. But possibly the most difficult problem are alleged criminal networks within the power generation system.
Police are investigating an alleged plot to poison Eskom’s chief executive, André de Ruyter, who drank coffee suspected to have been laced with cyanide.
After officially taking office in January 2020, De Ruyter led a company-wide clampdown on corruption and organised criminal behaviour, including sabotage of infrastructure, at Eskom plants. He has now resigned, citing a lack of political support, and will leave his post on 31 March.
A series of poor decisions by senior officials of the ruling African National Congress party (ANC), which has been in power since 1994, has also exacerbated the crisis over the last decade. Observers often cite the resistance of Gwede Mantashe, the energy minister, to private generation of power and to solar, wind or other renewable energy sources as a key recent factor.
Many senior ANC officials appear unwilling to accept responsibility for their failures. Mantashe has accused Eskom of seeking the overthrow of the government and Naledi Pandor, the foreign affairs minister, last week described Eskom’s failure to secure sufficient power for the country as “an oppositional act against South Africa”.
Despite the blackouts, regulatory authorities recently announced they would allow Eskom to increase prices by almost a third over the next two years, prompting opposition politicians to call for protests. “It’s time to hit the streets SA! Far too many citizens are barely able to keep their heads above water. This … increase is like a government jackboot pushing more of us under the surface,” tweeted John Steenhuisen, the leader of the centreright Democratic Alliance.
The crisis will further destabilise Ramaphosa, despite his re-election in December as leader of the ANC for a second five-year term in a party leadership contest.
Ramaphosa’s campaign was hit by the “farmgate” scandal that broke in June, involving somewhere between $580,000 and $5m of foreign currency found hidden at his private game farm. The 70-year-old centrist avoided impeachment after a parliamentary vote but he remains accused of holding undeclared foreign currency, tax evasion and misusing state resources.
Under the South African political system, Ramaphosa will now lead the ANC into general elections in 2024. Though the party is predicted to lose its longstanding majority, in part due to the power crisis, Ramaphosa is still likely to remain as president in any coalition government.
Economists say the effects of the energy shortages are yet to fully hit the economy, which had just recovered from the most immediate effects of the Covid-19 pandemic.
South Africa is one of the world’s biggest polluters of sulphur dioxide and carbon dioxide. It relies on coal for about 80% of its power generation.