Regulation uncertainty could hamper just energy transition

President Cyril Ramaphosa

President Cyril Ramaphosa

Published Jul 3, 2023


President Cyril Ramaphosa may be justified in his gripe against his critics for their suggestion that he “is not fully engaged with his job and the task of leading South Africa”.

His spokesperson in a media briefing on June 28 defiantly reminded us that “the president remains deeply motivated with leading reforms aimed at resolving the many (difficult) challenges facing our country, particularly on the economic front”.

On the international front he seems to have found a second wind leading an African peace mission to Ukraine and Russia, and attending the annual St Petersburg Economic Summit, preceded by an official visit to Switzerland and attending the New Global Financing Pact Summit in Paris where he also had bilateral talks on the sideline with several leaders, including President Lula da Silva of Brazil.

Prior to this he attended the inauguration of the new term of re-elected President Recep Tayyip Erdogan of Türkiye. He ended the month of June with the 8th Southern Africa Customs Union (Sacu) Heads of State and Government Summit in eSwatini.

At home he hosted official visits by the Portugese, Dutch and Danish prime ministers.

Whether he is rediscovering his diplomatic mojo of a few years ago when he was the African leader of choice to do business with and graced G7 summits as a guest, and featured at G20 indabas and the World Economic Forum in Davos, I doubt.

The Phala Phala scandal put paid to that and undermined Ramaphosa’s reputation as a reformer and anti-corruption activist.

Last Friday, Acting Public Protector Advocate Kholeka Gcaleka absolved Ramaphosa of alleged “abuse of power or breaches of the Executive Ethics Code” in relation to the theft of US$580 000 stashed in sofas at his Phala Phala game farm in 2020.

While the president has always maintained that he was not party to any wrongdoing and was not in violation of his oath of office, is the Gcaleka absolvement a mere vindication by technicality?

There remain unanswered questions over the origin of the cash and huge foreign exchange stash, which Gcaleka could not investigate any way because any breaches relating to tax matters or foreign exchange regulations fall under the purview of Sars and the SA Reserve Bank.

Rightly or wrongly, there is a perception both at home and abroad about a creeping listlessness and lack of policy urgency over economic reforms, of which the country’s sustained energy crisis highlighted by endless power cuts stands out like a sore thumb to universal incredulity.

The fault lines are converging to form the perfect storm in South Africa’s entrenched energy crisis. It is not a case of the president being fully engaged or distracted, but one of indecisiveness, weak leadership and a resort to casuistry.

The elephant in the room is: Who is ultimately responsible for energy policy in South Africa?

He has adopted a “Divide and Be Responsible” strategy which coalesces the country’s energy governance portfolio under three ministers – Gwede Mantashe; Pravin Gordhan, the Minister of Public Enterprises who is the shareholder representative for Eskom; and Kgosientsho Ramokgopa, the Minister of Electricity in the Presidency – whose mandates are as overlapping as they are competing. No wonder the perceived crisis of credibility that is giving rise to energy policy uncertainty, ineffectiveness and petulance.

Perhaps the president should heed the findings of a recent report by McKinsey that the “important factors in addressing (just) energy transition include adopting best practices for efficient decision making around permitting, matching incentives to policy priorities and the equitable division of benefits across all parties and supporting responsible environmental practices and sustainable development”.

Public policy decision-making and regulatory uncertainty could put the just transition at risk.

Parker is an economist and writer based in London

Cape Times