Corruption News

South Africa: Electricity outages compound ANC government crisis

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African National Congress (ANC) President Cyril Ramaphosa was forced to abandon his planned trip to the World Economic Forum’s (EEF) annual meeting in Davos. His government faces growing anger over the widespread power outages by Eskom, the state-owned electricity company that generates that 90 percent of South Africa’s power.

Last week, Eskom announced its worst ever power cuts are set to last indefinitely, surpassing last year’s record when it imposed at least 100 days of rolling blackouts that left factories, workplaces, schools, hospitals and households without electricity for up to 11 hours a day. The power cuts are believed to be costing around $235 million a year.

Ramaphosa with American President Joe Biden, September 2022. [Photo: The White House]

Unable to work amid an unemployment rate of 33 percent, many have lost their income. The streets remain unlit, traffic lights don’t work and there is massive disruption on the roads, while railways have almost ceased to function. Frustration and anger have grown as workplaces are forced to close, food has rotted amid disrupted supply chains, and crime has soared, amid the severe heat of the southern hemisphere summer and lack of water.

Adding to workers’ fury, the regulatory authorities have allowed Eskom to raise its prices by up to one third over the next two years as it faces insolvency. This comes as South Africa’s annual inflation rate is running at 7 percent in December, its highest rate since the rise in global food prices in 2008-09, with basic foods prices increasing by 12 percent over the last year. A loaf of white bread now costs 16.18 rand compared with 13.55 a year ago and the price of fuel has risen by 56.2 percent.

The rand has fallen from 15 to the US dollar to 17 in the last year, amid fears that instability could hold back the “reforms” demanded by the international financial institutions and markets as national debt rises to 84 percent of GDP. The South African central bank has sought to shore up the rand by raising interest rates seven times in the last year and is expected to raise them again his month.

People have taken to the streets after being left without electricity for more than 40 hours. In the eastern port city of Durban, residents put tyres and trees along the road and set them alight.

In a bid to alleviate Eskom’s financial crisis and allow it to import diesel to run its power stations, the ANC government has announced it will take over most of its $25 billion debts.


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