The South African Power Conundrum

What does the future hold for Eskom Holdings?

Conflicting Signals from the same Cabinet

The South African Government pronounced itself during the just ended Mining Indaba 2020 through the Ministry of Mineral Resources and Energy (Honourable Minister Gwede Mantashe); that the Government was now looking at the creation of a separate entity to spearhead New Power Generation projects / capability. From the tone it would seem like the Government is capitulating to the public sentiment that Eskom should be left intact. However, another Minister in the Ministry of Public Enterprises Honourable Minister Pravin Gordhan was stating the the Eskom Transmission Business was going to be a separate and independent unit by the end of the Month, meaning February 2020.

Is the Sunset of the MIGHTY ESKOM NIGH? - Pic (The Citizen)

These are very conflicting signals from two senior members of President Cyril Ramaphosa’s Cabinet. This lack of cohesion in public discourse and potentially different schools of thought cohabitating within one Cabinet; unit spells doom for any investors looking at investing in South Africa and by extension Southern Africa. Southern Africa is affected as it is heavily reliant on the Giant in South Africa (Eskom) for reliable and firm power. That is why the top destination countries for 2020 in Africa are not in Southern Africa.

The Heads of States in Southern and East Africa that are dependent on the Southern African Power Pool (SAPP) must start taking a keen interest on the issue as it more that just a sovereign issue; but a regional integration pain point. This also spells out the need to relook at the regions Power Strategy at country and Regional level in terms of the Agenda 2063 as spelt out by the African Union and the respective agendas look at a shorter time horizon of 2030.