In many rural areas the combination of power cuts and loadshedding, illegal dumping of rubbish and potholes drives away residents and hollows out once-vibrant small towns. The deteriorating infrastructure and the absence of reform means we will struggle to grow and create jobs. All this must lead to further economic decline – but it could also lay the way open to the ANC’s eviction at the polls, and reform. And it also leads to a further massive shift away from reliance on the state for any services, which could be viewed as both a good and bad thing, according to Jonathan Katzenellenbogen on the Daily Friend. – Sandra Laurence
South Africa: Constraints and Possibilities
Key aspects about the country’s direction of travel might have been uncertain a few years ago, but are now close to certainties.
We know that power cuts will worsen over the next decade, most municipalities will continue to decline, and the rail network and ports will not be fit for purpose. There is nothing new in the trends themselves, but what is new is the speed and scale of decline. This is the backdrop against which various scenarios will play out in the years ahead.
Our deteriorating infrastructure and the absence of reform means we will struggle to grow and create jobs. All this must lead to further economic decline but could also lay the way open to the ANC’s eviction at the polls, and reform. It will also lead to a further massive shift away from reliance on the state.
Power cuts have been worsening and will worsen further. Last year, 2022, we had more than 200 days of power cuts, compared to 48 days in the previous year. There is inadequate generation capacity, and stations in the coal-powered fleet require increasing maintenance due to their age and mismanagement.
Monique Le Roux, a CSIR researcher on energy systems, told ENCA towards the end of last year that we can expect power cuts for at least the next ten years. One big problem is that the country’s transmission capacity is insufficient for the power to be taken to places where demand is greatest. Demand is mostly in Gauteng, but the location of new sources of solar power is largely in the Northern Cape, and in the case of wind power, in the Western Cape. Le Roux says it would take at least a decade to build a new transmission network to cater for this change.
Another problem is that it takes from eight to ten years to complete a new coal or nuclear power station project. With its high level of debt and diminished project management capacity, Eskom is hardly in a position to embark on new large generation projects. And as private operators are only allowed to generate up to 100MW per project, they are excluded from large projects which could make a real difference.
What could be quick fixes, such as allowing private contractors to repair and run the existing fleet of coal-powered stations, are unlikely as the ANC is so far not prepared to face the criticism of backdoor privatisation. Besides, power over procurement is the ultimate source of power for corrupt elites. And Eskom itself has demonstrated that it cannot speedily carry out the maintenance that is required.
Many of the country’s towns and cities have suffered years of decay. Last year’s annual report on the state of local government finances by the Auditor General, covering the 2020/21 financial year, shows that only 41 of the country’s 257 municipalities had clean audits. While a clean audit is not a sign of high standards of service delivery, it is often a sign that a municipality is doing a number of things right. Failure to provide basic services like road repair, garbage collection, and water provision has forced many municipalities into a cycle of decline, resulting in businesses closing down and fleeing, and lower revenue from rates. Yet municipal rates rise as budgets and staffing levels are not cut.
A rising threat from the municipal mess stems from problems with water treatment plants. Intermittent access to water in eThekwini and the overflowing of sewage into the sea threaten the tourism industry in parts of the KwaZulu-Natal coast. In many smaller towns the combination of power cuts and load shedding, as well as illegal dumping of garbage and potholes, drives away customers and hollows out once-vibrant small towns.
Then there is the collapse of the rail network and the problems at ports. Rail and port bottlenecks have greatly worsened over the past year and there are no signs of these being comprehensively addressed. These bottlenecks throttle exports and imports and the economy, as orders cannot be met and opportunities are lost.
Past cases of sudden and unexpected reform might make one hesitant to say ANC ideology and practice can never change. So far there are minimal signs. Giving up a small share of power generation or a few rail routes to the private sector hardly amounts to fundamental reform. As the ruling party declines, the danger is of greater populism.
The ANC is facing the prospect of steep decline at the polls, but it will remain in power for at least the next ten years, possibly with the support of smaller parties. In the past the adage that “the ANC talks left, but walks right” held, but as the economy sputters and rewards have to be spread more widely, it might not be true. The bill giving national and local governments great powers to seize land was passed last year. The party must know that it cannot get votes on its poor record in building infrastructure and delivering services and jobs. Promises and expanding grants are its only way out with the voters.
We might get hints of its campaign for 2024 this weekend when the ANC holds its January 8th celebrations of the anniversary of its founding. The underlying ANC concern about reform is that it will mean an end to “transformation” and that key parts of the economy will be in white or foreign hands, and thus undermine empowerment. It fears that it would also mean loss of control over procurement and patronage.
At the ANC National Conference in December last year, President Cyril Ramaphosa was re-elected with a considerable majority over his challenger Zweli Mkhize. His margin of victory of 2,476 votes compared to Mkhize’s 1,893, is unlikely to be viewed as an endorsement of reform. It might instead be the result of deals, which makes Ramaphosa beholden to other factions likely to want some sort of reward. One of the rewards to supporting factions and a boost to ANC election prospects might be the introduction of a Basic Income Grant, presently being investigated by the Treasury.
With the likelihood of ten more years of ANC rule, power cuts, municipal decline and deterioration of infrastructure and services, and greater populism, the push will be on for far greater self-reliance. The better-off echelons of the middle class can afford to live in townhouse complexes, and have access to private schools, private security, and private health insurance, and their own inverters and solar panels. But it is impossible to insulate oneself from the overall direction of travel of the economy. Besides, one has to pay rates and taxes.
However much the ANC might promise to change and buy votes with greater grants, the power cuts and municipal decay underscore the fact that its days are coming to an end. Ongoing power cuts, filthy streets and sewage pouring out into the sea send a powerful message about the need for change. It is just a matter of how long that takes to sink in among the voters.
Read more:
- New investment in SA is vital – but is our infrastructure reliable enough?
- Government incompetence and electoral irony – Johannes Wessels
- Only one-third of SA’s water infrastructure is operational
