Despite Eskom implementing consistent power cuts since the beginning of this month, Finance Minister Tito Mboweni says South Africans can still rely on the embattled state-owned enterprise (SOE) to provide electricity.
“It’s not true that we don’t have electricity in South Africa. We can’t be a doomsday sayer that says there is no electricity in South Africa,” Mboweni said.
“Yes, we experience load-shedding from time to time. We can’t spin that away. We also don’t want to lie to people because if you lie then you will get caught,” he said.
Mboweni was speaking at a pre-World Economic Forum (WEF) breakfast meeting in Johannesburg on Thursday where he spoke about some of the expectations and issues that Team South Africa will address at the WEF. This year’s annual meeting of the global and political elite from January 21-24 will be held under the theme: “Stakeholders for a Cohesive and Sustainable World”.
Against the backdrop of slow economic growth, weakening state-owned enterprises and rolling power cuts, Mboweni will have to assure investors that the country is implementing structural reforms. These include those at Eskom and South African Airways (SAA).
These reforms, Mboweni said, are mapped out in the national treasury’s position paper titled: Economic transformation, inclusive growth and competitiveness: towards an economic strategy for South Africa.
The pace of these structural reforms has been slow and has hindered economic growth, Mboweni said, adding that the “never-ending demands” of ailing SOEs continue to weaken the country’s fiscus. Mboweni also bemoaned the huge amount of “wastage and corruption” by SOEs.
“Sustainable state-owned enterprises will require our support because they should be able to demonstrate that they can generate a revenue stream that is sustainable. Those who don’t have a revenue stream that is not sustainable must ask themselves about their existence.”
Government is yet to provide the R2-billion bailout which it promised to SAA last year. The airline was put into business rescue in December in a bid to save about 10 000 jobs and the airline from going under. Mboweni said the government, the airline’s management and the appointed business rescue practitioner are working towards finding “additional finance” for SAA.
“We face a difficult fiscal environment. Despite this the South African authorities are determined to proceed responsibly in supporting growth-enhancing initiatives and the poor are still being supported by social security systems,” he said.
Mboweni also emphasised that despite debates in the ruling party on the independence of the SA Reserve Bank, the central bank will carry out its mandate as prescribed in the Constitution without “fear.”
He said constitutionalism, along with political stability, is key to the country achieving its political objectives.
“There is political stability in the country which is key to the achievement of our economic objectives. Despite the riffraffs that you see in Parliament, our political system is stable,” he said.
Trade and Industry Minister Ebrahim Patel, who will also form part of the SA delegation to the WEF, said that the annual meeting is an opportunity to assure investors that the country is moving “further than we were before”.
Patel said South Africa will highlight some of its achievements over the past year, including going through a peaceful election and the ease of doing business here.
“Investors are not going to be interested in all the details but they want to know that there is a mindset that recognises that in order to promote entrepreneurship and to integrate small business into the economy, you need to open the doors to them,” he said.