South African labour minister Thulas Nxesi said he is against any move to privatise the beleaguered power utility Eskom, as it struggles to generate power, avoid outages and repay R396 billion of debt.
Privatising the company would be detrimental to the poor, employment and labour minister Thulas Nxesi said in an interview.
“am not a proponent of privatisation of key state assets, If you privatize electricity, you can forget about the majority of people having access to electricity, it is going to be very expensive for them. That’s why government steps in when there is market failure,” said Nxesi
Meanwhile, President Cyril Ramaphosa’s government has previously denied any plans to sell the company, there have been calls to divest from the asset. S&P Global Ratings said privatization may be the best option to resolve the power crisis in Africa’s most-industrialized nation.
Eskom poses a significant risk to South Africa’s economy and its public finances, with the government guaranteeing as much as R350 billion rand ($20.6 billion) of its debt. The utility has been intermittently cutting 6,000 megawatts from the grid since last month, leaving the country in darkness for hours at a time and further constraining industrial output and growth.
Ramaphosa has also announced policy changes to cut excessive bureaucracy and enable private investors to build their own power plants with up to 100 megawatts of generating capacity without requiring a license. The state has also encouraged more support for renewable-energy projects to supplement the country’s needs.
Nxesi said the governing African National Congress could upset South Africans if it’s unable to resolve the energy crisis by 2024 when the next general election is set to take place.