President
Jacob Zuma has explained the failure of Eskom to supply electricity to South
Africa by pointing out that the electrical infrastructure of South Africa was
never designed to supply electricity to eleven million households.
That is
quite an admission, coming from a man who is notorious for making promises that
he cannot keep and probably never intended to keep. What it says is that the ANC, which ‘has a
good story to tell’, failed to understand that electricity, and power
generation in general, is one of the markers of development of any country. He explained to the listeners at Davos,
polite people who don’t attempt to put a speaker on the spot, that the South
African Government is taking steps to resolve the difficulty, and that South
Africa will soon have a reliable electricity supply.
The truth
is that the problem is multifaceted.
·
The
number of households being supplied with electricity, most of it free in
accordance with the ANC’s plan to make itself attractive to the voters by being
the Party of ‘handouts to the poor’, is increasing dramatically, but the usage
of electricity by households is a small fraction of the amount required to
support the development necessary to create the jobs to employ all of those
people. The huge influx of Africans,
Chinese and Pakistanis after the statement by President Thabo Mbeki that South
Africa belongs to the Africans, a statement that implied that the ‘Africans’ do
not include the Whites who built up the infrastructure that Mbeki was offering
to the rest of the continent, has resulted in a massive population growth, many
of them people who are not employed, and probably will not be employed in their
lifetimes as a result of the ineptitude of the ANC in generating economic
growth and the abjectly poor education all the children receive, making them
unfit for any job other than manual labour.
And, of course, the closeness of the ANC to the South African Communist Party
and to Cosatu goes a long way to ensure that even the manual labour jobs are
being priced out of the market.
·
The
failure of Eskom to ensure an adequate and reliable supply of electricity is
largely a result of
o
the
failure of the ANC Government to authorise the capital expenditure known to
them since 2003 to be essential to meet the needs of the country,
o
the
failure of Eskom under a series of heavily salaried CEOs, all of whom received
large bonuses for their ‘good performance’, to ensure that the essential maintenance
was carried out. This is a failure that
is common to all of the organisations that the ANC cadres manage. In 2012, the executives at Eskom were
instructed by the then CEO to cut back maintenance by 80%!
o
the
incompetent project management by Eskom of the Medupi project, which was
projected to come on stream six years ago at a cost of about 20% of the current
projections. Statements made in November
2014 that the first portion would be in operation by December 15, 2014, only
three weeks in the future, were abjectly incorrect, and the date was corrected
to January 15, 2015, and, since then, to sometime in March! It should be noted that the Department of
Energy failed to put the year to that date, no doubt having learned that a firm
date for a promise to be met is a sure way to attract criticism.
o
the
brain drain from Eskom, in common with every other part of the economy, as a
result of the flagrantly anti-White statements and policies of the ANC
Government, and coupled with the BBEEE policies which state clearly that no
White male has any future in the country, has resulted in a serious lack of
skills of every type in Eskom, a lack which is presently only partly compensated
by the employment of dozens of skilled contractors from abroad. This condition has not been publicised by
Eskom or the Government, probably because that would raise questions about the
cost of such contractors and consultants, a cost which could have been saved by
employing the local talent and by generating a pool of such local talent by the
simple means of ensuring that the schoolchildren are given an education
adequate to ensure that their latent abilities are developed to the level
needed. But then, of course, it was
Mbeki’s policy to develop a nation of lowly-skilled artisans sufficient to meet
the needs of a service-based economy.
One wonders where Mbeki and, by implication the ANC, planned to source
the skills needed to develop the economy.
o
The
current state of the South African economy, with the economy declining at an
increasing rate every month, with SA Bonds being downgraded on a regular basis,
and with the promises of Government to make the changes necessary to bring
about recovery being observed only in the excuses that Zuma gives at each State
of the Nation address, precludes almost any large-scale corrective capital
expenditure being made. The funds are
simply not there, and the world financial community is simply no longer willing
to pump money into this failing economy.
The QE program of the Federal Reserve has come to an end, and the
support that the South African bonds gained from the fact that they offered 5%
greater return than the cost of the money will not be there, while the crashing
Rand makes any investment in Rands a risky affair. The only option that will be available to the
Government to fund the investment that is urgently required by Eskom will be to
print money. This is a hazardous option
in every way, as has clearly been shown by Zimbabwe, but the actions of the ANC
in bringing the country to this crisis demonstrate very clearly that the
leadership of the nation is either oblivious to the risks, or is willing to
undertake them in the hope that they will be able to hang on a little longer,
to pad their Swiss bank accounts a little more, and to build fortified palaces
to retire to when the gullible public realises that the party has come to an
end.
What does
all of this mean to South Africa?
The best
guess is that the electricity crisis will continue and worsen, until a new
Government is able to convince the world that it really means business,
probably by replacing the corrupt and incompetent ANC cadres in every field of
Government with honest, competent and hardworking people who have the good of
the country at heart, not only their own pockets. That process can start only after the next
general election or, as seems to be increasingly likely, after the brewing revolution
throws the ANC out of office. One can
only hope that the process of dissolution of the economy will leave enough
behind to start the rebuilding process.
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