Eskom is a year shy of a century old.
This would have been time to celebrate one of the iconic achievements of South Africa regarding how Eskom under Dr Hendrik Johannes van der Bijl spawned industrialisation in South Africa on a grand scale. The East Asian Tigers would be coming to South Africa to learn.
However, in commemorating the success of Eskom, it would not mean forgetting the ills of apartheid, but the power utility could be the well from which South Africans could drink the water while they puff a peace pipe.
Yet, it is not to be. We have desecrated the grave of Van der Bijl and probably tried to, but failed dismally, to understand and protect his legacy.
Professor Dumisa Bonke, now appointed as the acting judge of the High Court of South Africa, is also a prolific writer and commentator on matters relevant to the economy in our country.
When Eskom hit Level 6 load shedding, he came out with an opinion piece in Business Report, published on July 9, “Stage 6 load shedding is destroying the economy”.
Certainly the title is correct, and for a good part of the article, I could not find fault with his arguments, which included the lack of political will on the side of the government to deploy legitimate state power or aggression to stop what has become anaemic lawlessness in South Africa. This includes cable theft.
Bonke concludes thus on the perennial “shenanigans” at Eskom: “Government monopolies and monopsonies are never good for any country. The time has come for significant private sector involvement in both electricity generation and electricity distribution. This may help reduce the vulnerability of South Africans to self-serving Eskom employees and service providers.”
This is where my path separates from my good friend and professor. Hopefully, I will never have to appear before him in the court of justice, where my point of difference expressed here might influence his judgment.
The point of the role of government and the private sector in the matter of how the state dispenses services and justice has been deliberated extensively. This includes the arguments about the efficiency of the government in executing its work versus the private sector.
At some point, in an attempt to emulate socialism in the East, African countries, in particular Ghana, created government departmental stores that sold not only “essenco” (essential commodities) such as maize meal, rice and palm oil etc., but also provided non-essential staples.
The approach saw a reincarnation in the 70s and 80s when Ghana went into a major meltdown. This approach, I would argue, is not one to be adopted. This is because there is a possibility for some level of perfect competition that the market can enable on such goods and services. Only a light touch of regulation at the maximum is adequate to manage such economic spaces and outlets.
But on matters of power services, the government presents the case for a natural monopoly.
Van der Bijl made the point when he established Eskom that for South Africa to be a force, it should secure affordable and reliable energy and steel. As regards the latter, he established Iscor. Van der Bijl’s philosophy litters the economic prospects of industrialisation in South Africa.
The question, therefore, to Bonke is why did Van der Bijl succeed where a black democratic and majority government is failing. It cannot be that it is because it is the government, nor can it be said that the whites were better at governance because they are white.
Let us take, for instance, the spacecraft James Webb that was launched on Christmas Day. It was a feat of excellence, led by government honchos in science. The private sector may find it difficult to collaborate at that scale.
The benefits of Webb are to capture humanity’s lens of thought. This is how Van der Bijl and General Jan Smuts inspired the industrial world.
They deployed government power to build and not to loot. Mariana Mazzucato, a professor in the Economics of Innovation and Public Value at University College London, has a name for this feat of success: she calls it an entrepreneurial state.
Such a state as regards rail and electricity would have installed electronic communication security on Eskom and rail lines, and at the slightest tempering of the infrastructure, the signal would be transmitted to the control centre giving coordinates of perturbance and signalling dispatch for intervention. The cable thieves would be apprehended in the act, locked, appear before a court of law and incarcerated for treason.
Bonke cannot be right in saying the government is bad at managing monopoly. What is bad are the systems you put in place and the people you deploy. This is the ANC disease and has nothing to do with the efficacy of natural monopolies.
Dr Pali Lehohla is the Director of Economic Modelling Academy, a Professor of Practice at University of Johannesburg, a Research Associate at Oxford and the former Statistician-General of South Africa.