/ 8 September 2022

Editorial: South Africa’s inertia on finding solution to Eskom will bite even more

Blackouts Cripple South Africa Again
Slow-moving vehicles line the streets as traffic lights stand without power during a load-shedding power outage period in Pretoria. (Waldo Swiegers/Bloomberg via Getty Images)

As a country, South Africa sure has a knack for bad timing. We were never quite able to take full advantage of a commodity price boom that was inspired by China’s insatiable appetite for building kilometres upon kilometres of roads and skyscrapers to house its urbanising population. 

It is an infrastructure boom that has long since waned, with the country sitting with the prospect of a housing market collapse the likes of which we’ve never seen. 

But while the boom was happening we, unlike countries such as Australia and to an extent Brazil, didn’t fully leverage off those golden years of growth.

And even in the aftermath of the 2008 financial sector crash — a period when the world’s leading investment capitals sought the higher growth rates that emerging markets offered over the developed world — we unfortunately were being led by an unfocused and in the end corrupt Jacob Zuma administration.  

We could have done so much more with those cheap dollars that were floating about looking for higher growth until the eventual scaling back of the printing presses of the world’s leading central bankers if we had inspired any faith in the state’s capabilities to execute on the many economic plans that we were once lauded for.

It’s a perception that will come to bite us once more — as we become just one of many countries across the globe that are now facing an energy crisis. For so long it seemed like we were the only game in town when it came to needing a massive overhaul of our energy market in the wake of more than a decade of load-shedding from ailing parastatal Eskom.

We aren’t the only game in town. The spectre of load-shedding looms for even some of the biggest economies in the world stretching from Europe and into Asia.

The world’s leading capitals are seeking a solution to their energy crisis that has emerged in the wake of Europe’s seven-month-long war. Against this backdrop, we have to consider just how valued a customer South Africa is in the energy market with a country such as Germany, the old continent’s biggest economy, preparing for a real possibility of protests in its streets this winter without the security of gas supply from Putin’s Russia. 

It’s clear who will be the client of choice for the world’s leading and all too few engineering giants accustomed to providing the sort of solutions that provide thousands of megawatts into a nation’s energy grid. It won’t be a South Africa  that has bungled its electricity expansion plans over the past 14 years.

While noises out of government have been encouraging in their acceptance that our energy market needs a vast overhaul and that a just transition is the only path to avoiding the economically depressing spectre of load-shedding (even in our summer months), we know that movement will continue to be slow.

We have had a long lead time to get ahead of the issue of power in South Africa. It’s a lead time that looks like it will be wasted as bigger economies with much bigger wallets look to expand power generation. 

The fact that South Africa went into an electricity deficit position shouldn’t have come as any surprise to the bureaucrats in Pretoria, as Eskom had warned of such a scenario as far back as 1998. 

One of the successes of the early ANC administrations was ensuring the vast majority of South Africans gained access to power, which meant more demand on the system — especially as China flooded the consumer market with cheap electrical goods, not to mention those bar heaters that should have been long banned.

Our inertia gave us 14 years of an electricity crisis, today it pits us against a desperate Europe. Answering the question as to when our electricity crisis will come to an end has become even more difficult in the wake of the Russia-Ukraine war in ways we are yet to fully understand.