By Prof. Busisiwe Mavuso
Unemployment is worsening and we need to ensure that we are doing everything possible to turn around our economic performance.
The Eskom board is weaponising lender complexity to resist unbundling. Lenders are open to engagement; the board just needs to start.
- NUM’s court action to block the ITSO is misdirected. The real threat to Eskom is R114bn in municipal arrears, not unbundling.
- Electricity minister Ramokgopa is fighting in court for coal generation the government has no plans to use. His focus must be on delivering the agreed reform agenda.
The dreadful unemployment figures last week signal a worsening crisis, especially for our young people. It is a sign of the failure to get our economy to grow at a pace that creates jobs. The causes are not mysterious – from logistics to the energy system, investors are waiting for implementation so that they can start investing. There is no single issue blocking that – rather there is a national commitment that we need to demonstrate, showing that we are serious about implementing the reforms that will lead to growth.
Instead, there are too many signs of a lack of urgency and commitment to follow through. The Eskom board’s resistance to the unbundling of transmission assets into an independent system operator (ITSO) is one of the clearest examples. I have consistently acknowledged that this restructuring involves real complexity – principally the position of Eskom’s lenders, who have billions of rand committed to the utility. Obviously, the transmission assets are currently on the balance sheet of the utility to which they have lent those billions. They will not want the creditworthiness of that utility compromised through the unbundling. That is perfectly understandable, and respect for the rights of lenders and other investors is paramount in the process. But the bankers and lenders I speak to are clear that they are open to the conversation. It just needs to start. The Eskom board is not starting it. That is the problem.
There is a difference between acknowledging complexity and weaponising it to resist change. An Eskom board genuinely committed to navigating the reform pathway would be focused on how to work through the lender issue – engaging directly, proposing structures, building confidence. Instead, the signals are of slow-walking, of foregrounding obstacles rather than solutions, of hoping that political will fades the longer the process is dragged out. Every month of delay is a month in which investment is deferred and jobs are not created. Eskom’s lenders are not against reform – most of them are strongly invested in seeing South Africa grow. What undermines their confidence is not the reform itself but the absence of credible implementation.
I do not have confidence that the current Eskom leadership is genuinely committed to the success of these reforms. What I need to see is a board that talks of solutions rather than obstacles, that is actively engaged with lenders to chart a clear pathway, and that approaches the complexity with the conviction that the outcome – a competitive electricity market with reliable, affordable power – is worth the effort. That is not what we are seeing.
The National Union of Mineworkers has also gone to court to block these reforms, claiming they will “kill Eskom”. That claim does not hold up. Eskom’s lenders would never permit an outcome that destroys the utility’s viability – their own exposure makes that impossible. The real threat to Eskom is not unbundling; it is the R114bn in municipal arrears that continues to grow. Fixing that must be central to the restructuring process, and BLSA has said so consistently. NUM’s energy would be better directed at the municipal debt crisis than opposing the reforms designed to fix it. Business has worked closely with Eskom to support its operational recovery and will continue to do so. Our commitment to Eskom’s long-term sustainability is not in question.
Meanwhile, electricity minister Kgosientsho Ramokgopa will be in the Supreme Court this week, appealing a High Court judgment that stopped new coal procurement, finding in favour of several environmental NGOs. I cannot see how this is a good use of the minister’s time or public money. The 2025 Integrated Resource Plan includes zero new coal generation – so the minister is fighting in court for a technology the government has no plans to use. New coal generation will not happen in any case; such projects are unbankable. No financier will touch them. Coal is yesterday’s technology. The minister’s time and energy should be directed at what actually matters: engaging lenders on the ITSO transaction structure, providing a clear timetable for the Sawem launch this quarter, and demonstrating the political will to push these reforms through against institutional resistance.
We forget that South Africa was once a country that delivered on its promises. The result was economic growth of 5% a year, an investment-grade credit rating, and an unemployment rate far lower than today’s. We lost our way after 2008, particularly through the Zuma years. We have been too slow to get back on our feet. The reforms that will restore that trajectory are agreed, mapped and in progress. We have the potential to trigger substantial new industries that would create many jobs, such as renewable energy which holds huge promise, but we are at risk of fundamentally undermining investor confidence by not following through on already-agreed policy.
What stands between us and their delivery is a small number of actors – in boardrooms, in unions, in government offices – who are content to slow-walk change while millions of South Africans wait for jobs that are not coming. We must reject that with contempt and focus single-mindedly on doing what is necessary to get this economy growing again.
