DA calls on Minister Mboweni to come clean on Treasury’s reported Eskom debt swop

20 May 2019

The Democratic Alliance (DA) notes reports that National Treasury is considering is a debt swop or a partial debt swop, in order to keep Eskom from collapse.

The DA strongly opposes this idea, as it would likely send the country down the dark path of a downgrade to junk status

Reports of this debt swop come after President Cyril Ramaphosa ruled out this option earlier this year. This proposed plan will not address the underlying problems at Eskom, it’s simply a temporary solution to the massive governance failures at the utility.

As it is the Minister of Finance who has the authority to make this decision, the DA calls on Minister Tito Mboweni and National Treasury to come clean and give an urgent update on Government’s reported plans on a debt swop. The DA has also called for a Debate of National Importance on Eskom’s financial crises.

The reality is that a debt swop will not solve the problems at the power utility and as it is simply an attempt to hide the true state of Eskom’s dire financial affairs.

A debt swop of this nature is not feasible for South Africa’s standing in the long-term, as it will result in an estimated R100 billion in investment to flow out of the country.

The DA will continue to keep a close eye on the developments at Eskom, as we maintain that the challenges at Eskom is far greater than the ANC government would want the public to believe.

Issued by Alf Lees, DA Shadow Minister of Finance, 20 May 2019