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It’s splendid that a steely spined young South African woman is the crowbar levering open a window to expose a stale, smoky room full of centrist, bureaucratic, ideologically bound wreckers of our economy. Here Jonathan Katzenellenbogen, writing in the Daily Friend, examines Busi Mavuso’s walk out of the misdirected, self-important Scopa grilling of her Eskom board. His diagnosis? Historical ANC malnutrition caused by a dismal diet of cadre deployment, lack of exercising rigorous historical Eskom oversight, and poor goal setting. All of it clearly caused by Eskom’s previous near-delinquent and corruption-riven ANC-compliant Eskom board and their acolytes … not Ms Busi Mavuso’s reformed outfit. She has become an overnight folk hero, accidentally also exposing the softly-softly, almost sycophantic approach of too many big businesses towards government as it continues to white ant their bottom lines. How? Mavuso heads up Business Leadership SA, whose members she might now well embolden. Takes a strong woman of Africa to show the way. – Chris Bateman
Busi Mavuso’s challenge to the ANC
By Jonathan Katzenellenbogen*
Last week, Busi Mavuso, an Eskom non-executive director and head of the country’s most prominent business body, may have thrown down a bigger challenge to the government than she had initially thought. She said what we all know: that the present Eskom board should not be blamed for the disaster created by the ANC.
Mavuso has been cheered on social media and could become an icon for standing up to the ANC. She comes away from this episode with prospects for a big role in the country’s future.
Her undiplomatic and forceful stand goes well beyond the issues of Eskom, and that is why she laid down an important marker. It is not reading too much into her outburst to see that this is a loud protest about ANC misgovernance, a plea for reform, and new ways of doing things. It points to years of ANC cadre deployment to Eskom and contracts for those close to the party as being the primary wreckers of Eskom.
For many years, and particularly under ANC rule, we have had a pliant business community. No one else in the business community, except perhaps CEO of Sibanye-Stillwater, Neal Froneman, has dared speak so directly to the government.
As executive director of Business Leadership South Africa (BLSA), the association which represents the biggest companies in the country, Mavuso has considerable standing. She often takes on the government over delayed reform and incompetence in her weekly newsletters and columns, but does offer praise when she sees progress.
After a heated exchange with the chairperson of Parliament’s Standing Committee on Public Accounts (Scopa), which was looking into Eskom, she dramatically excused herself from the hearing. Scopa chairperson Mkhuleko Hlengwa had given her the choice, “to either behave yourself or excuse yourself”.
Someone in the room
Hlengwa is a member of the Inkatha Freedom Party, but his line of questioning raised Mavuso’s ire. She saw it blaming the present board for problems created in the past by the ANC. Hlengwa had said that “someone in the room would have to answer” for the problems at Medupi and Kusile, mammoth power projects which have still not reached full generation capacity after substantial cost and time overruns.
Mavuso replied that the current Eskom board cannot be the ‘fall guy’ for the mess at Eskom.
“The reality of the matter is that this is not our mess,” she told Scopa.
She told Fin24: “We are happy to be investigated if Scopa thinks this board is involved in nefarious activities, but what is not going to happen is that this board and André de Ruyter (Eskom CEO) are made the fall guy for the mess created by the ANC government. His framing could not be left unchallenged.”
She may well have been out of line in her behaviour, but since the state is Eskom’s sole shareholder, looking into the Stage 4 load-shedding of the past few weeks is within Scopa’s mandate. She was accused by Scopa’s chair of playing “gutter politics” and told that “we will be making fundamental recommendations about yourself”.
The department of public enterprises said her conduct was regrettable and unbecoming of a board member. For all the threats against her for standing up, there is not much the chair of Scopa or the Department of Public Enterprises can do.
On Monday, President Cyril Ramaphosa seemed to want to draw a line under the entire affair with his declaration of support for the Eskom board. Anyway, firing her from the board would create a storm, and BLSA members are probably cheering her in private. She says what they have long felt.
As power cuts have worsened, the ANC has been increasingly blaming Eskom so as to absolve the party from the many years of cadre deployment and corruption. Last year, the deputy secretary general of the ANC, Jessie Duarte, demanded answers from Eskom over power cuts. Her questions about Eskom were important ones, but the reasons for power cuts stem from the ANC itself. It cannot rid itself from interfering in state-owned enterprises, deploying incompetents, and handing out contracts, all of which result in a highly unprofitable cost structure. The Eskom board operates in an ANC labyrinth of rules and regulations that gives little room for manoeuvre.
Earlier this week the new chair of the ANC’s Economic Transformation Committee, Mmamoloko Kubayi, spoke in this interview about keeping deployees at Eskom accountable, although she said the utility should have operational independence. Her basic premise was that deployment of ANC cadres to Eskom was acceptable.
Eskom and other public enterprises operate in an ANC-created environment that almost guarantees collapse. Government has not taken the measures to bring more power onto the grid: something that Eskom CEO André de Ruyter has recommended. Among other things, he has called for independent power producers to be allowed to supply additional power through a change in their contracts with Eskom, making it easier for private power producers to supply power, and for an exemption from the Public Finance Management Act so as to cut out middlemen and go directly to original equipment suppliers.
The entire model of having Eskom in public hands is flawed, in an environment in which the ANC can still deploy people to any public entity. If Eskom were in private hands, it would be accountable to the government on environmental, regulatory and other matters, but not on operational issues. The market would reward or punish Eskom for its successes or failures.
The ANC is so wedded to the model of retaining some state control over public enterprises that it is unable to shift from this, even in the face of Eskom’s difficulty in keeping the lights on. In its latest policy proposal ahead of its policy conference later this year, the ANC has proposed that the private sector take stakes in state-owned enterprises.
What private company would want to take a stake in a government-controlled entity in South Africa?
The best are not employed
State-owned enterprises operate well in many countries where they are strictly independent of government. But in South Africa the control and policy mess means that low returns are almost guaranteed. With cadre deployment and racial quotas, the best are not employed. And due to rules on public contracts, state-owned enterprises are forced to make purchases through middlemen, which drives up prices.
Add to that a bit of waste and corruption and the expense of having to defer to the main shareholder, government, and an income statement covered in red is almost guaranteed.
Busi Mavuso deserves our support.
- Jonathan Katzenellenbogen is a Johannesburg-based freelance financial journalist. His articles have appeared on DefenceWeb, Politicsweb, as well as in a number of overseas publications. Jonathan has also worked on Business Day and as a TV and radio reporter and newsreader.
- The views of the writer are not necessarily the views of the Daily Friend or the IRR. If you like what you have just read, support the Daily Friend.
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