Enoch Godongwana has ruled out additional state funding for debt-laden Eskom, underscoring the government’s disjointed approach to resolving South Africa’s debilitating energy crisis.
Godongwana’s comments come after newly appointed electricity minister Kgosientsho Ramokgopa called for more fiscal support for the company that’s survived on government bailouts since 2008, when it started imposing rolling blackouts that are hobbling the economy. Eskom has subjected the country to blackouts for all but one 24-hour cycle this year as its poorly maintained coal-fired fleet struggles to meet demand.
Deviations would also rattle investors who have placed a premium on the currency because of the slow pace of economic reforms, severe power rationing and logistics network constraints that are eroding the country’s growth prospects, disrupting local supply chains and stoking inflation. The rand has weakened 7.6% against the dollar this year, making it the second worst performer in a basket of 16 major currencies tracked by Bloomberg.
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