Three months after the national elections, in his second address to the state on Thursday President Cyril Ramaphosa set out a long list of priorities, crowned with economic growth and Eskom salvage, restoring hope and resolving deep-rooted troubles in South Africa.
Ramaphosa unveiled plans to separate generating, transmission and distribution facilities of a debt-laden power company, stressing that the ongoing crisis “could seriously damage our ambitions in the field of economic and social development.”
He said that the government would provide further financial support to Eskom, which has a debt of R 2525 billion in government-guaranteed debt, and Finance Minister Tito Mboweni would further provide detailed information in his presentation on the budget at the end of the month.
Ramaphosa acknowledged that the depth of the problems at Eskom was such that savings and tariff increases could not stabilize it, and said that the separation of the three branches of Eskom was inevitable because in the future it would help the company to attract funding in the open market easily.
“To give confidence to this turn and position the South African energy sector for the future, we will immediately begin the process of creating three separate structures – generation, transmission and distribution – within the framework of Eskom Holdings.” He said that the network transmission independence was the key.
“Of particular and direct importance is the fact that the company manages an independent state transmission network in combination with the system operator and the functions of planning, purchasing and purchasing electricity.” He added that , consumers and the national budget would be protected throughout the process whereas the main imperative for the government would be the economic recovery. “The challenge ahead is enormous. First of all, we need to get our economy back to work, ”he said. “I urge every South African to make it his own business. Because when we succeed – and we are sure of it – the whole country will win.
Ramaphosa pointed out that the state would eliminate the causes of slowing investment in infrastructure, actively seek to expand export markets while reducing dependence on imports and eliminating barriers to the prosperity of small businesses. To help achieve the latter, he will sign an amendment to the Competition Law.
He said that provinces would be forced to help capitalize on his investment contribution and “ensure that we create investment books for each of our nine provinces in order to present them to potential investors.”
In addition, addressing the problem of housing shortages and the growth of informal settlements, Ramaphosa announced the creation of the Development Bank for human settlements, seeking to use both public and private funding as well as other means to eliminate the backlog in the housing sector.