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Eskom – losses escalating but still open to supplying Zimbabwe

According to EWN Eskom has stated that it is still willing to aid Zimbabwe with its power crisis – because Zimbabwe is already a customer.

According to Fin24 Zimbabwe is currently implementing load shedding due to low water levels at Kariba Dam, generation constraints at Hwange Power Station and limited imports from Eskom in South Africa and Mozambique.

The Kariba Dam provides hydro electricity to both Zimbabwe and Zambia, but Zimbabwe suffered low rainfall in 2018 and 2019.

According to CNN earlier this year, climate change has meant that over the past five years the rains have come late, the November rainy seasons has moved to January.

“We’re experiencing the worst style of drought. If we receive rains, it will be like a cyclone: very violent, too windy. Very erratic. So you cannot bank on it. Things are changing every day,” Jemitias Denhere, a district agronomist, told CNN.

Meanwhile in South Africa Eskom is still technically insolvent according to News24.

Professor Anton Eberhard of UCT’s Graduate School of Business told delegates at the African Utility Week that the utility survives by borrowing.

A big chunk of the problem is that it is owed about R17 billion by Soweto, and other municipalities owe it another R17 billion.

Now that the elections are past, Nersa has granted Eskom a 15% hike in power tariffs for major municipalities according to The South African.

My Take

This is what the majority voted for.

Okay we owe Zimbabwe as a nation because the ANC supported Robert Mugabe when he lost their national elections. Mugabe got to continue as president all the way up to the point where the military eventually had to kick him out in a coup.

Their economy is now in ruins and it looks like it will be incredibly difficult for them to recover.

That said, we’re not in a position to pay that debt.

Unemployment of over 10% is generally considered a crisis in a functional economy, we’re over 27%. The 15% hike that Eskom just won isn’t going to do much good if people don’t pay it, and people can’t pay what they don’t have.

The net result for the major municipalities is that funding will have to be diverted from other things to pay the power bill. That is how the city can absorb some of the hike.

One of the things that Ramaphosa promised during his election campaign was that the ANC would deal with the housing crisis and improve on service delivery. The ANC made a big performance over lack of service delivery in Alexandra Township for example, and this did in fact eat into the DA’s support.

The ANC runs Eskom, what the 15% hike means for cities is that money which was supposed to go to delivering services now has to be diverted to paying Eskom.

Just one week later and we have an example of how the ANC has gotten in the way of the ANC delivering on its electoral promises.

And at the same time as this is going on, we’re hearing the same people who’re hiking the tariffs tell us that they can step in and help Zimbabwe, a nation which we helped beggar.

But this is what the majority voted for, its not a surprise that this would happen, and it is well within what we’ve experienced over the past twenty years – the actions and the promises have never particularly matched up.

 

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