MAKHUDU SEFARA | Shed half-hearted measures and burn R40bn to keep the lights on

During the medium-term budget policy statement late last year, finance minister Enoch Godongwana said the SA Revenue Services raised R1.56-trillion — before increasing revenue estimates because our Sars colleagues were over-performing.

The commodities boom, transient though it seemed, also helped. This is why the government had no qualms spending more billions of rand on the R350 grants.

In parliament this week, TimesLIVE Premium reported Eskom senior officials saying the entity has spent R18bn, which is R10bn more than the budgeted R8bn for the financial year ending March. Eskom CFO Calib Cassim projects the entity would have spent R22bn by then. This is the most we have spent on diesel because we have endured the worst load-shedding season ever in the past two decades.

It may appear outrageous to some, impractical to others, but I will make the proposal anyway: South Africa should budget and spend R30bn to R40bn, if this keeps the lights on. Forget that Eskom had budgeted R8bn and overspent. This budgeting had not taken into consideration the level of incompetence and absence of clarity about what load-shedding does to an economy.

In an economy of R1.6-trillion, we surely can afford to find savings of R40bn to make sure the economy functions. There can be no debate about whether there is unacceptable wastage in government expenditure. While government’s salary bill is high, we must resist the temptation to do the lazy thing of just freezing salary increases and hoping for the best. There is so much that can be saved by just removing the frills from government activities.

Granted, Eskom’s open-cycle gas turbines (OCGT) “were never designed to be operated as base load generators, and it would be inadvisable to consider them as such”, according to Eskom CEO Andre de Ruyter. He told MPs the main reason they were “unable to run (OCGT) to their maximum capacity” is because of lack of funds. If government has an option to allow Eskom to use the OCGT to the maximum to which De Ruyter refers, why not? If we did not simply speak about prudence but ensured that government funds are used appropriately, we would find the R40bn.

Load-shedding has become a symbol of the ANC’s inability to get anything right ... It even attracts even parties led by matriculants to march on Luthuli House claiming, correctly, that the ANC is a scene of the crime.

If we also took into consideration the cost of load-shedding to this economy, spending R40bn (as a stop-gap measure) will justify keeping the economy running. In a piece by Duma Gqubule in the Sunday Times in December, he shares mind-blowing figures about the damage load-shedding unleashes on the economy. Gqubule writes: “Since 2018, the blackouts have cost the economy R1.1-trillion based on a gazetted cost of unserved energy of R87.75c per kilowatt hour. The power blackouts cost the economy R16.8bn (0.3% of GDP) in 2018, R118.6bn (2.1% of GDP) in 2019, R157.8bn (2.8% of GDP) in 2020, R212.2bn (3.4% of GDP) in 2021 and R556.1bn (8.5% of GDP) in 2022.”

Now, if we can afford an extra R40bn courtesy of our over-performing Sars officials, why not be bold and keep the lights for a while as we await a more permanent and sustainable solution? The problem is that we are shy to admit that incompetence by De Ruyter and his colleagues is costly. As a result, we do half-measures. We subject the country to the worst ever load-shedding, incur the biggest ever cost on diesel (R18bn) and still inflict much pain on the economy.

What if Eskom had spent double that R18bn and no-one was retrenched because of load-shedding, small businesses affected by this nonsense were operational, the chickens were still alive, those relying on oxygen tanks don’t get mini-strokes each time Eskom load-shedding stages were ramped up?

Let’s read this again: the power blackouts cost the economy R16.8bn (0.3% of GDP) in 2018, R118.6bn (2.1% of GDP) in 2019, R157.8bn (2.8% of GDP) in 2020, R212.2bn (3.4% of GDP) in 2021 and R556.1bn (8.5% of GDP) in 2022.” It’s worth reading twice.

If this load-shedding, a bane of our existence, forces our president to abandon his planned trip to the World Economic Forum in Davos, forces him to cancel his trip to the UN, then we should redirect our resources to keep the lights on. If keeping the lights on might save us from rampant criminality as we remain prey to marauding gangs in our homes, save us from job-shedding and also save thousands of chickens and other animals, what, in the bigger scheme of things, is R40bn?

Load-shedding has become a symbol of the ANC’s inability to get anything right. The Business Day piece this week indicating that the ANC might get under 40% in the general election next year, mainly on account of load-shedding, shows just how this affects everything. In addition, it even attracts parties led by matriculants to march on Luthuli House claiming, correctly, that the ANC is a scene of the crime.

If government wanted to force departments and municipalities to release R40bn in savings, surely these could be found. The wastage in government is legendary. In any case, Sars’s reputed over-performance will surely release an additional R18bn for Eskom to burn.

The ANC and Ramaphosa are pussyfooting about finding the money for this simple solution that may help them keep the lights on, ward off the DA’s noisy matriculants while working on a more sustainable solution. Use the cabinet lekgotla, Mr President, to find the savings and make us forget load-shedding for months!