Government was warned this would happen (BusinessTech)

Staff Writer17 April 2023SubscribeAs South Africa continues to experience load shedding at high levels – and with the threat of worse to come – those tasked with resolving the crisis are not on the same page, the Bureau for Economic Research (BER) says.This has led to some incoherence between ministers, standing policy and potential solutions to the crisis – and is something many experts warned would happen when the president added yet another minister into the mix.South Africa has run out of time to bring actionable solutions to the energy crisis, with winter months – pushing up demand – fast approaching and Eskom unable to provide even 24,000MW of power with consistency.Instead of having a solid plan of action in place, those in charge of dealing with the crisis are still umming and ahing over how to even start addressing the problem, while calling for sharp policy shifts from plans that have been in place for years.Too many cooksThe old adage of “too many cooks in the kitchen” is ringing true in South Africa, as the country now has three – even up to five – ministers that now govern or have some say in the energy sector and embattled power utility Eskom in particular.Mineral Resources and Energy minister Gwede Mantashe is in charge of the energy portfolio in general, and has control over mining, coal and diesel policy, which is vital to Eskom’s operations.Public Enterprises minister Pravin Gordhan is in charge of select state companies, including Eskom, and oversees the operational and administrative processes of these groups.The latest minister in the pool is the Electricity minister, Kgosientsho Ramokgopa, whose task is to oversee and resolve the load shedding crisis. He has described his role as a portfolio manager in which Eskom and the ‘energy action plan’ is the main focus.On the sidelines – though no less influential – is Forestry, Fisheries and Environment minister Barbara Creecy, and head of National Treasury, Enoch Godongwana.While Creecy is not directly involved with Eskom, her portfolio is a vital checkpoint in the power utility’s operations. Treasury, meanwhile, holds the keys to vital funding that Eskom often needs to keep the lights on.Predictable outcomeWhen Ramokgopa’s position was announced in February 2023, commentators – including economists, analysts, opposition parties, business interest groups and civil action groups – all expressed concern that wires would get crossed and Eskom would simply have too many people to answer to.Instead of narrowing the focus of government to resolve the crisis, stakeholders warned that the waters would get muddied, too many interests at play, and too many positions taken.In the last few weeks, this exact problem has started emerging.Following a weeks-long tour of all the coal power stations in the country, Ramokgopa has started speaking of various ‘options’ to resolve the energy crisis, with extending the lifespan of the coal stations emerging as a favourable direction.This assessment was made at the same time that the energy department gazetted the next phase of renewable energy procurement as per the Integrated Resource Plan for 2019 (IRP19) – which is the same plan that will see coal stations rapidly decommissioned over the next few decades.South Africa’s push towards renewable energy is a key factor in drawing international investment, loans and grants from developed countries. Billions of dollars have already been committed to this plan.Of course, this hasn’t stopped South Africa’s ministers from wanting these plans reviewed and possibly renegotiated.According to the BER, the return of severe load-shedding has coincided with these key ministers, tasked with resolving the power crisis, “not singing from the same hymn sheet” on Eskom.“This incoherence is a predictable outcome of too many ministers being tasked with finding solutions for arguably South Africa’s biggest crisis,” it said.Dark cloudMeanwhile, load shedding continues to hang over the economy and sentiment towards South Africa in general, the BER noted.“Despite the usual fanfare of mainly local companies mostly reaffirming previously announced capex plans in SA, the energy situation put a cloud over President Cyril Ramaphosa’s fifth investment conference.“If nothing else, the event, hosted in Sandton last week, is useful in the sense that it illustrates that notwithstanding the many business constraints in SA, the private sector continues to seek out opportunities to invest in the country.“However, the level of overall fixed investment remains vastly inadequate to achieve faster rates of real GDP growth,” it said.Although increasing from a paltry 13.1% of GDP in 2021 and reversing several years of decline, the ratio of nominal gross fixed investment to nominal GDP was still only 14.1% in 2022.This remains a far cry from the 30% of GDP target (by 2030) set in the National Development Plan (NDP), the BER said.