Eskom in serious trouble
The Auditor General (AG) said Eskom is in serious financial trouble, with R57 billion in operating losses and current liabilities exceeding current assets by R50 billion.
The AG presented her Eskom audit outcomes to Parliament’s Portfolio Committee on Electricity and Energy on 29 January 2025.
The report highlighted that Eskom made very little progress in implementing recommendations made by auditors over the years.
This has resulted in Eskom’s dismal financial situation, where the underlying root causes for its demise have not been addressed.
The AG said Eskom continued to submit financial statements which contained material misstatements in multiple account balances and disclosures.
“The significant internal control deficiencies that resulted in negative audit outcomes for at least the previous five years were not addressed,” the AG said.
The report revealed there is a material breakdown in controls over compliance with applicable laws and regulations at Eskom.
This has hindered the power utility’s ability to prevent material non-compliance findings, resulting in qualified audit opinions.
“Adequate action is not taken against officials who contravene the supply chain management prescripts, resulting in continued noncompliance and irregular expenditure,” it said.
“Failure to implement consequence management encourages a culture where the disregard for legislation, policies, and procedures thrives.”
The report said there is a lack of accountability at various organisational levels, inadequate oversight and monitoring processes, and ineffective consequence management.
Simply put, people at Eskom continue to steal and engage in corruption without anything happening to them.
Eskom also failed to meet numerous targets, hurting the power utility and the South African economy.
It failed to meet its 80% energy availability factor target, did not increase the reserve margin, and did not reach its planned R22 billion savings from turnaround initiatives.
Eskom further failed to comply with environmental laws and regulations, there is a backlog of forensic cases, and it did not meet minimum financial standards.
Eskom’s financial viability

The AG said that while Eskom is a going concern, various dependencies and internal and external uncertainties could impact this position.
The AG’s report highlighted that Eskom’s operating losses increased from R26 billion in 2023 to R57 billion in 2024, which is unsustainable.
The power utility’s current liabilities exceed current assets by R50 billion. Curiously, this differs from what Eskom said in its annual report.
Eskom reported current liabilities of R156.8 billion and current assets of R115.4 billion, which equates to a differential of R41 billion.
The AG highlighted many of Eskom’s challenges, including:
- Eskom continues to rely on the government for debt support.
- Uncertainty surrounds the timing of price rulings by the National Electricity Regulator of South Africa (Nersa) and the continued application of the current methodology.
- There is a big jump in municipal debt. This position has deteriorated more than expected in 2024 and after the end of the financial year.
- There are significant electricity losses due to illegal connections, ghost vending, and illegal token sales.
“The going concern assumption remains fully dependent on the generation recovery programme’s ongoing positive and incremental impact,” the AG said.
To improve its financial position, Eskom plans to save R4.95 billion in the current financial year and R5.17 billion in 2025/26.
However, Eskom lacks appropriate systems, processes, and controls to quantify irregular, fruitless, and wasteful expenditures or losses due to criminal conduct.
“These are areas of significant financial drain through which Eskom continues to lose money and fail to quantify how much was lost,” the AG said.
“Therefore, the targeted savings will not be impactful or sustainable for as long as there is still a culture of non-compliance and crime.”
Recommendations to Eskom

The AG said South Africa has legislation and policies to regulate responsible and effective financial and performance management.
This legislation protects public funds and resources and should ensure that Eskom’s leadership and officials behave ethically and act in the state’s best interest.
However, Eskom has not implemented these legislation and policies, which caused tremendous damage to the company.
The AG gave recommendations to improve Eskom’s position –
- The board should assess progress in implementation and impact of measures to strengthen internal capacity, consequence management and the control environment.
- Measures should be implemented to address the internal control deficiencies and proper record-keeping processes should be assessed for effectiveness.
- A better audit action plan must be developed to address the root causes of repeat material misstatements in the annual financial statements.
- An internal audit must monitor the action plans, and the audit committee should play an oversight role in ensuring effective implementation and monitoring.
- A plan must be developed to respond to each area of drivers or root causes of material weaknesses. Key individuals should be allocated to drive, implement, and monitor preventative controls.
The AG said Eskom must be responsive to the public, oversight and other stakeholders through reporting and providing answers on mandated responsibilities.
Eskom’s overall audit outcomes

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