Why South Africa's electricity crisis is at the heart of its problems
When Nelson Mandela's African National Congress came to power almost three decades ago, South Africa was blessed with a surfeit of electricity—a legacy of the apartheid regime's obsession with self-reliance in the face of crippling sanctions against its White supremacist rule.
The democratic government that replaced it prioritized expanding access, electrifying 2.5 million predominantly Black households in its first four years. The surplus from a fleet of coal-fired plants was even tapped to light up homes in neighboring nations.
Fast forward to today, and some 86% of South African households are connected to the grid, compared with 40% for Africa as a whole.
But the good news ends there. Those households go without electricity at least 10 hours a day on average. It was apparent years ago that a lack of planning by ANC governments, and their failure to build new plants while maintaining those already in place, had hobbled the continent's most-industrialized nation.
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Now the consequences of the ANC's inability to resolve its power crisis are growing dire. As the world's biggest economic powers court Africa with an intensity unseen in decades—the leaders of both the US and China are expected this year—South Africa risks being left in the dark.
Brownouts and blackouts aren't the only challenges the nation faces. The continent's biggest freight rail network is crumbling, the country's ports are among the world's most inefficient and crime is rampant.
South Africa's foreign policy is also in disarray. Failing to condemn Vladimir Putin's invasion of Ukraine and hosting naval exercises with Russia angered key trading partners, including the US and European Union. This month, the US ambassador accused the country of allowing arms to be loaded onto a Russian ship at a military base.
For a nation that's billed itself as Africa's leader—touting its role as the only African member of the Group of 20—South Africa is arguably starting to lose its position.
This month, Japanese Prime Minister Fumio Kishida and German Chancellor Olaf Scholz both visited Africa, but neither included South Africa on the itinerary. And South African officials weren't invited to this weekend's G-7 summit—for only the second time in six years. So who will be there? The leaders of its emerging-market peers: Brazil, India, Indonesia and Vietnam.
Much of South Africa's decline comes back to the absence of reliable electricity and the broader economic malaise it's causing. The ANC's responsibility for the outages, which are not only a hindrance for households but deter investment, can be traced back to around 2001, when the national utility, Eskom, was told not to build new power plants. The government's thinking was that new generation would be built by private investors. The problem is they never came.
And while corruption and managerial neglect have also been issues, there's little evidence the policies that triggered the crisis have changed.
President Cyril Ramaphosa appointed the country's first-ever electricity minister, Kgosientsho Ramokgopa two months ago. But Ramaphosa has yet to give him any authority, leaving the minister to conduct a series of tours to power plants and TV studios.
Authority instead resides with the energy and public-enterprises ministers—strong political allies of the president who have accomplished little.
The cost of procrastination is becoming clear. With power cuts deepening into the South African winter, Rand Merchant Bank recently reversed its prediction of 0.3% economic growth this year, and now sees a 0.8% contraction. Even central bank governor Lesetja Kganyago said this month the country was "suffering from largely self-inflicted wounds."
As the ANC is set to face its toughest-ever electoral test in a year's time, there have been some positive steps. Private companies are now allowed to build generation plants of any size for their own use, and municipalities are seeking supplies independent of Eskom.
But these moves will take time, and aren't the hard decisions needed to resolve the situation.
Disclaimer: This article first appeared on Bloomberg, and is published by special syndication arrangement.
