SoNA 2023: The Breakdown

SoNA 2023: The Breakdown

SoNA 2023: The Breakdown

If there were ever a suitable omen for things to come, Madam Speaker’s faux pas asking for a moment of silence for prayers or medication to usher in the State of the Nation Address for 2023 was certainly spot on.

The only great novelty was probably that lights across the whole of SA were on for the duration of the Address – something we haven’t witnessed in a while.

Stating the obvious

While the president stated that he’d give an account of the progress in implementing the commitments made in last year’s SoNA, South Africans were left far more uncertain about our future than before.

Some of the numbers in question:

 – National Disaster Management Centre has classified the energy crisis a national state of disaster – state of disaster bill would be gazetted with immediate effect.
 – Matric pass rate of 80% (Real pass rate was 54.6% due to a dropout rate of 31.8% students according to the DA)
 – Economy is larger than it was before the pandemic.
 – Over 500k jobs created between Q3 of 2021 and 2022
 – Over 300 deaths during public violence in July 2021 – most ‘simultaneous’ since dawn of SA’s democracy.
 – National Treasury still finalising solution for Eskom’s R400bn debt burden.
 – Government will secure additional funding for diesel for 2023 for Eskom.
 – Eskom will buy excess power from private generators and neighbouring countries.
 – SAPS has established a team to deal with corruption and theft at Eskom (with 43 arrests so far).
 – National Transmission Company will soon be operational (Eskom’s own estimates noted that the rollout will take a further 2-3 years until completion)
 – Solar power incentives to businesses and households to be announced during Budget Speech.
 – Transnet roadmap still underway – plan is to create a separate Infrastructure Manager for rail network by Oct 23.
 – PRASA restructure still underway.
 – Port Elizabeth Automotive Terminal more than doubled capacity with increase in exports.
 – Department of Water and Sanitation investing in major infrastructure projects.
 – Construction of Lesotho Highlands Phase Two project to commence 2023.
 – First phase of Umzimvubu Water Project to commence next financial year after 9-year delay.
 – Other dam projects underway.
 – Water-use licence backlog cleared and turnaround time for applications reduced to 90 days.
 – R4bn in public infrastructure projects completed and R232bn under construction.
 – SANRAL awarded contracts worth R18bn over last three months.
 – Construction of 24 bridges announced as part of Welisizwe programme underway.
 – Spectrum auction in telecommunications sector contributed R14bn to fiscus.
 – All households to be migrated to digital from analogue tv transmission in 2023.
 – R367bn in investment commitments raised at 4th SAIC.
 – Focus on local production of goods normally imported.
 – Department of Agriculture, Land Reform and Rural Development + Department of Health to address conditions for cultivation of outdoor hemp and cannabis as well as collection of harvest from traditional farmers.
 – Regulatory framework for above to enable use of whole plant for complimentary medicines, food, cosmetics and industrial products.
 – Bounceback loan scheme to continue in assisting small and medium businesses with economic recovery.
 – Business Act 1991 will be amended to make entrepreneurship easier.
 – SEFA to provide R1.4bn financing to 90k entrepreneurs.
 – State Bank plans underway (via Postbank Amendment Bill)
 – Remote worker visa and special dispensation for high-growth start-ups to be introduced.
 – DHA appointed first cohort of 10k unemployed youths to digitise more than 340m paper-based civic records.
 – Over 1m title deed backlog for houses.
 – 10k new police recruits graduated + 10k to be trained in 2023.
 – Specialised police task teams tackling specialised crimes taking action against criminals.
 – 10111 police helpline to be supported by private sector call centre operations.
 – 163 of 257 municipalities are dysfunctional or under poor governance and due to corruption.
 – R7bn in state capture assets returned, R12.9bn assets frozen and 187 accused taken to court.

These aren’t all the points covered, but there wasn’t much clarity about anything in particular.

What was the Eskom action plan?

Given the energy crisis is top of mind, the president spent quite some time on this topic. And yet the time spent on the topic provided South Africans with very little insight into the future of loadshedding.

The 5 key Eskom interventions were:

 – Fix Eskom’s coal-fired power stations to improve availability of existing supply.
 – Enable and accelerate private investment in generation capacity.
 – Accelerate procurement of new capacity from renewables, gas and battery storage.
 – Enable businesses and households to invest in rooftop solar.
 – Fundamentally transform the electricity sector for long-term energy security.

The president must assume we suffer memory loss – for this is one of several action plans announced over the years. Since 2019 we’d been promised the same things time and again with no progress made:

 – an unbundling of Eskom into 3 distinct entities
 – a remodelling of Eskom to relieve its debt burden
 – a new CEO who would drastically overhaul Eskom and improve performance within months
 – appointment of external engineers and auditors to determine the source of Eskom’s crisis
 – employment of 800 investigators and 277 prosecutors to expedite scrutiny and prosecution of SOE corruption
 – cutting down Eskom’s bloated staff complement to reduce staff expenditure
 – prosecuting corrupt parties in the utility
 – improving Eskom’s infrastructure and maintenance to reduce breakdowns
 – reducing Eskom’s reliance on coal and focusing on renewable energy

What we got instead…

 – Instead of unbundling Eskom into three entities, we will get a new Ministry of Electricity to oversee Eskom, while Eskom’s transformation will still be overseen by Minister of Public Enterprises – Praving Gordhan.
 – Instead of ceasing loadshedding, loadshedding has become an indefinite part of our lives, with 100 days of uninterrupted loadshedding thus far.
 – While municipal debt at Eskom increased by nearly R10bn year-on-year, municipal rate increases for 2023 will be lower than direct customer price increases.
 – Eskom is still fighting with NERSA in courts for various revenue clearing account (RCA) disputes going as far back as 2015 – the cost of the lawsuits to taxpayer has not been disclosed.
 – Loadshedding increased year on year from 670 hours to 1011 hours per annum.
 – Supply has reduced by 1605 GWh in 2022.
 – EAF deteriorated by 64.02% in 2022 and currently sits at 56% (down from 84.5% in 2011).
 – Corrections and upgrades at various plants, including Medupi and Kusile have an estimated completion date ranging from October 2023 to December 2027.
 – Eskom backtracked on initial plans to reduce staff complement in October 2022 – stating that they need new talent as well as re-appointing former talent.
 – Eskom increased employees annual wage increases across the board to 7% in 2022 (from 3% in 2021).

These are but a few of Eskom’s remarkable failures which seem to increase by the minute. The most confounding thing is certainly that our Government does not hold any decision makers to account, nor penalise them for poor performance. In any other business – such as the private sector – underperformers must account for their failings in performance meetings which see them demoted or even fired for such gross negligence. When it comes to government SOEs, however, it seems that one can stay quite comfy in your position at the top, as long as you have enough people and things to point the finger at for your failures.

We’ll have to wait and see what the State of Disaster Bill details, and see what our Minister of Finance will outline in the Budget Review. Until then, South Africans can but only lament another series of empty promises and disappointing results.

Check in next time for more…

Rand Rescue will delve deeper into the State of Disaster and Eskom action plan after the Budget Review later this month.

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  3. [LEGAL ACTION] “The South African Local Government Association v Eskom Holdings SOC Limited, Minister of Mineral Resources and Energy, Minister of Co-Operative Governance and TRaditional Affairs, Minister of Public Enterprises, National Energy Regulator of South Africa, Sasol Chemical Industries (Pty) Ltd, West Rand Power Distributors cc., Vleesbaai Dienste (Pty) Ltd, South African National Parks, Mpumalanga Economic Growth Agency, Damplaas Kragbron (Pty) Ltd, AECI & Ithala SOC Limited.”CASE NO: 46214/21. High Court of South Africa.
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  8. “South Africa’s ‘Real’ Matric Pass Rate Is Under 55%”. Businesstech.Co.Za.
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