Bongani Motsa, a senior economist at the Minerals Council of South Africa, argues that it is time for the government to sell Eskom.
The Minerals Council is a mining industry employers’ organisation that supports and promotes the South African mining industry.
Motsa told The Money Show’s Bruce Whitfield that the government could not continue to pump money into the failing power utility, which is bleeding the fiscus dry.
Over the next three years, the government will provide Eskom with debt relief of R254 billion.
This will take the form of advances of R78 billion in 2023/24, R66 billion in 2024/25 and R40 billion in 2025/26.
These amounts represent Eskom’s full debt settlement requirement over the next three years.
Motsa highlighted that this is not the only bailout Eskom received. It previously got R69 billion from the state. “We believe Eskom should not be getting money from the fiscus,” he said.
The power utility last paid dividends to the government in 2005, which shows that it is not a valuable asset to the state.
He said the government could use the billions wasted on Eskom to improve South Africa’s citizens’ education, health and safety.
Motsa said Eskom was created to provide abundant, affordable electricity to South Africa’s mining and related industries.
However, with large tariff increases and consistent load-shedding, Eskom is failing in both departments.
Commenting on how much Eskom’s assets are worth, Motsa said market forces could determine it.
“It is much better for those assets to be in private hands than with the government as the shareholder,” he said.
“The private sector will capitalise Eskom sufficiently, bring in new skills, and retain existing skills.”
Although it is not politically palatable for the ruling party to privatise Eskom, Motsa said their solution is not ideological.
“The government is pumping billions into failing state-owned enterprises, and nothing tangible comes from it,” he said.
“To privatise Eskom’s whole value chain, including generation and distribution, will benefit South Africa.”