President Cyril Ramaphosa says  South Africans should accept the reality of load shedding. Delivering the State-of-the-Nation- Address (SONA) in Parliament, Ramaphosa says in order for Eskom to address its maintenance backlog, load shedding will remain a reality.

“The reality that we will need to accept is that in order for Eskom to undertake the fundamental maintenance necessary to improve the reliability of supply, load-shedding will remain a possibility for the immediate future. Where load-shedding is unavoidable, it must be undertaken in a manner that is predictable and minimises disruption and the cost to firms and households.”

Eskom has recently been on the spotlight following weeks of load shedding with Federation of Unions of South Africa (Fedusa) proposing that it be placed under business rescue as opposed to using public servants pension funds to bail out the ailing power utility.

Fedusa said it rejects the proposal brought forward by the Congress of South African Trade Unions which suggests that the Public Investment Corporation should step in to take on R250 billion of Eskom’s debt.

Challenges facing the power utility Eskom, have according to Ramaphosa negatively affected the economy.  “The load shedding of the last few months has had a debilitating effect on our country. It has severely set back our efforts to rebuild the economy and to create jobs. Every time it occurs, it disrupts people’s lives, causing frustration, inconvenience, hardship.”

Unemployment, job creation and economy

Ramaphosa says the government is working on building a favourable environment for business to ensure job creation.   “These issues include water use licences, which are so essential to operations on farms, factories and mines, have previously taken an inordinately long time to process, sometimes up to 5 years. We are able to announce that water use licences are now issued within 90 days.  It used to take months to have a company registered, through the Bizportal platform one can now register a company in one day, register for UIF and SARS and even open a bank account.”

Currently, South Africa’s unemployment rate stands at 29.1 %. The graphic below shows unemployment figures for 2019: 

Unemployment Rate in South Africa by SABC Digital News

Ramaphosa acknowledged that the economy is not growing as it should be.

“The recovery of our economy has stalled as persistent energy shortages have disrupted businesses and people’s lives. Several state-owned enterprises are in distress, and our public finances are under severe pressure.”

Ramaphosa has unveiled a plan to establish a state bank, to extend financial services to all South Africans.  The establishment of a bank is an effort to address worsening poverty and unemployment.

” We have decided to establish a sovereign wealth fund as a means to preserve and grow the national endowment of our nation. We are also proceeding with the establishment of a state bank as part of our effort to extend access to financial services to all South Africans the minister of finance will provide details on this in his budget.”

Watch the SONA below :