IFP welcomes withdrawal of Eskom exemption

5 April 2023

The Inkatha Freedom Party (IFP) welcomes the announcement by Finance Minister, Enoch Godongwana, to withdraw the recent exemption granted to Eskom as per the Government Gazette of 31 March 2023.

This irrational exemption specified that Eskom did not have to disclose “any irregular expenditure and fruitless and wasteful expenditure that occurred during the financial years in the annual report” for the financial years 2022/23, 2023/24 and 2024/25.

Taking this sweeping decision without any public consultation, and the pursuant withdrawal, highlights how reckless the Minister was to take this decision behind closed doors. It is only due to the outcry from the public that this exemption was withdrawn – otherwise it would have been quietly passed.

Of deep concern is that the Minister spoke of “detailed consultations” that would now need to take place with the Auditor-General, as well as Eskom’s auditors, Deloitte. This would be to ensure that the necessary “checks-and-balances for corruption are tightened”.

How could this exemption be granted without such consultations having taken place first?

Of further concern is that this exemption was granted in order to allow Eskom to “raise funds”.

During the recent Budget Speech, Minister Godongwana said, “We are proposing a total debt-relief arrangement for Eskom of R 254 billion. This consists of two components. One is R184 billion. This represents Eskom’s full debt settlement requirement in three tranches over the medium term. Second is a direct take-over of up to R70 billion of Eskom’s loan portfolio in 2025/26.”

If government proposed a “total debt-relief arrangement”, why then, would we be encouraging Eskom to attempt to make yet more debt?

This entire debacle has created the opposite of what it was supposedly designed to achieve: instead of improving Eskom’s prospects, Eskom’s books will now be subjected to even closer scrutiny than ever before.

As the IFP, we will continue to monitor this situation very closely. We further do not believe that this irrational exemption should be reconsidered or reimagined in any form.

Issued by Inkosi Em Buthelezi, IFP Deputy President and Spokesperson on Finance, 5 April 2023