The dreadful unemployment figures released last week signal a worsening crisis, especially for our young people. It is a sign of the failure to get our economy growing at a pace that creates jobs. The causes are not mysterious – from logistics to the energy system, investors are waiting for implementation before they commit. There is no single issue blocking that. Rather, there is a national commitment 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 follow-through. The Eskom board’s resistance to unbundling transmission assets into an independent transmission 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.
The transmission assets sit on the balance sheet of the utility to which they have lent those billions, and they will not want its creditworthiness compromised through unbundling. That is perfectly understandable, and respect for the rights of lenders and other investors is paramount. 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. A 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 political will fades the longer the process drags on.
Absence of credible implementation
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 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.
Read: Ramaphosa signs off on taking the grid away from Eskom
The National Union of Mineworkers (NUM) 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 R114-billion in municipal arrears that continues to grow. Fixing that must be central to the restructuring process, and Business Leadership South Africa has said so consistently. NUM’s energy would be better directed at the municipal debt crisis than at 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, energy minister Kgosientsho Ramokgopa will be in the supreme court of appeal this week, challenging a high court judgment that stopped new coal procurement in favour of several environmental NGOs. I cannot see how this is a good use of the minister’s time or of 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 and 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 launch of the South African wholesale electricity market (Sawem) 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, and 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 – renewable energy holds huge promise – but we risk fundamentally undermining investor confidence by not following through on already-agreed policy.
Read: The debate about the grid is over
What stands between us and delivery is a small number of actors, in boardrooms, in unions and 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.
