Brexit-type clock ticks for Eskom

The smart money is already leaving the country ahead of two looming dates on the economic calendar, a news agency reported this week. The dates are October 30 — when Finance Minister Tito Mboweni tables the medium-term budget — and two days later, November 1 — when Moody’s announces whether the country’s debt is still investment grade.

“We need urgent progress on reforming institutions that are a drag on our current performance,” Mboweni told the NEC, warning “that action now can avoid even greater pain later and that, if no corrections occur, even in a slow environment, we face greater adjustments in three years time”. But the elephant in this room that will need addressing if any of the mooted reforms are to work, is fixing the broken Eskom. And with a Boris Johnson-type guillotine less than a month away, there are numerous, competing options for the way forward.

But the ANC’s economic transformation head, Enoch Godongwana, speaking on Tuesday at an asset management industry function, said he did not support the creation of a special-purpose vehicle to take on Eskom debt. Neither did he back the green transaction in the form currently being proposed. So, there appear still to be multiple options on the table, including an auction, a blended green-finance facility, a transfer to debt from utility to sovereign, and an equity partner, which might include worker or social ownership.

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