On Saturday, 20 January the head of South African government business and Deputy President of South Africa, Cyril Ramaphosa, announced several changes to the Board of state-owned company, Eskom. The move, according to the statement released by Rampahosa, is “aimed at stabilising management at the energy parastatal.”
Eskom has been at the centre of a state capture spectacle in South Africa, where private actors, notably the notorious Gupta family, allegedly used connections with senior ANC government figures to engineer preferential contracts at the state entity. After lengthy delays, supposedly because of obstruction by President Jacob Zuma, the state has finally started investigating the depth of the state capture in South Africa, which was initially unearthed by leaks and reports by the South African press. Eskom, as well as other companies fingered in the probe, were slapped with asset seizures last week, and Zuma also acquiesced to forming a state of capture enquiry weeks ago, after the North Gauteng High Court instructed him to do so.
The new Board, including its chair, Jabu Mabuza, as well as acting Chief Executive, Phakamani Hadebe, face an uphill battle of steadying the company, uncovering the extent and depth of state capture at the parastatal, and addressing the financial shortfalls that still may prompt the entity to seek a loan from the IMF, and more importantly, address the country’s energy insecurity.
Eskom is in many ways, symptomatic of the whole South African economy. The growth of corruption, particularly under Jacob Zuma administration, has seen increases in wastage, patronage-networks and incompetence in many government departments, including at state-owned companies such as Eskom. At the broader level, South Africa’s approach to state capitalism, and therefore state capitalism has been rudderless, or lacking any clear aims and strategies in the post apartheid era. Perhaps the installment of Mabuza, who is a current chair of another company, which has significant government shareholding, Telkom, can help turn things around. Despite the government owning 39.3% of Telkom, the company has been able to in recent years refashion itself from an archaic monopoly to a modern, highly competitive, and efficient market player.
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