Rate payers will keep footing Eskom bill

Interview with Newzroom Afrika

Below is my interview this morning with Newzroom Africa following Eskom’s announcement that it lost R24billion in 2023.

My general sense is that the taxpayer is still going to keep Eskom afloat until sufficient alternatives exist. The utility is in a death spiral, but it’s not South African airways that can just be sold for scrap.

Energy’s role in the economy is too important to just let go for 1 rand per power station and anyone that advocates for privatisation needs to be aware of the horrible examples in the past. Notably the Russian-Ukraine War occured, in part, because of the privatization reforms that the IMF imposed on Ukraine before the 2014 maidan coup d’etat. Zimbabwe is another example of a country that privatised its electricity infrastructure, only to renationalize it after the private investors ran it into the ground.

Nationalized utilities can, under the right conditions and proper management, actually outperform private utilities.

But the wider debate about the future role of Eskom and electricity markets is not taking place in South Africa, it’s rather just being imposed from the top down without much thinking going on from the proponents.