Editor’s Note: February 14, 2019
Lights out for South Africa’s ‘new dawn’?
South Africa’s public enterprises ministry has reportedly warned that the country’s struggling power utility Eskom needs a bailout by April, or risk collapse.
This comes as the company enters its fifth day of rolling blackouts that have added more misery to president Cyril Ramaphosa’s efforts to kickstart South Africa’s sluggish economy ahead of election in May.
Eskom’s troubles are part of a growing list of issues that have eroded enthusiasm for Ramaphosa’s reform agenda, and his promise of a ‘new dawn’ following the Zuma years.
Business confidence has tanked amid concerns about policy direction in Africa’s most industrialized economy, with growth of just 1.3% forecast for 2019. A steady flow of bad news is reinforcing a picture of doom and gloom.
All of this was of course predictable. South Africa faces well known structural problems, ranging from poorly run state-owned enterprises to rampant inequality and high unemployment.
There is little comfort in this. Eskom’s power cuts underline how serious, and imminent, the risks to South Africa’s already struggling economy are.
The government has taken proactive steps to root out the rot of the Zuma years, while outlining a more long-term vision, but there is a growing sense that it’s simply not enough.
It’s not looking good for South Africa’s ‘new dawn’.
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