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EDINBURGH — South Africans have come to expect to live for prolonged periods by candlelight and fire up private generators to cope with lengthy electricity blackouts. But, for the international investors that President Cyril Ramaphosa is trying to attract to the country, euphemistically labelled loadshedding is a sign that the economy is very sick. That is the message in the Financial Times, a newspaper with global reach into the asset management houses in the world’s financial centres. Ramaphosa must fix up Eskom, which has been the focus of corruption scandals under former president Jacob Zuma. If he doesn’t clean up the state-owned utility soon, and facilitate plans to rapidly improve power generation across the country, South Africa can be expected to slide back into recession. – Jackie Cameron
By Thulasizwe Sithole
Recovery may be shortlived as Eskom prepares for spate of power blackouts, the London-headquartered Financial Times tells its readers.
South Africa emerged from recession in the third quarter of the year, easing pressure on President Cyril Ramaphosa over his handling of the economy, the newspaper notes. The continent’s most industrialised economy grew 2.2% quarter on quarter in the three months to the end of September.
“Rebounds in manufacturing, finance and trade drove the recovery despite an 8.8% drop in mining output, South Africa’s statistics agency said on Tuesday. But on Tuesday the country entered its sixth consecutive day of the so-called ‘loadshedding’ — outages aimed at forestalling total blackouts — as Eskom’s power plants continued to struggle.
“The crisis has exposed the difficulties facing Mr Ramaphosa as he attempts to revive the South African economy, which stagnated under his predecessor. The country’s output has not grown for more than three consecutive quarters since 2014-2015 and has not surpassed annual growth of 2% since 2013. Central bank forecasts for annual growth in 2018 remain weak at less than one per cent,” the FT reports.
“Mr Ramaphosa is also seeking to reassure investors that the ANC will not compromise property rights as it moves ahead with a constitutional change to allow the expropriation of land without payment. The ANC says the policy is necessary to ease massive inequality in land ownership that has persisted since the end of apartheid,” the pink paper tells its influential readership.
“Ramaphosa has said he is making progress on a target to raise $100bn of international investment, but faces difficult decisions on how to fix broken state companies such as Eskom.”
The newspaper flags up Ramaphosa’s appointee Shamila Batohi as an adviser to the prosecutor of the International Criminal Court as a positive step.
“She is expected to take the lead on prosecutions including a longstanding corruption case against Mr Zuma and those involving the controversial Gupta business family, which have recently faltered. The Guptas and Mr Zuma have denied any wrongdoing,” adds the FT.
Cyril Ramaphosa: The Audio Biography
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