DA submits Eskom PFMA exemption comments
19 April 2023
The Democratic Alliance (DA) has submitted our commentary on Eskom's proposed exemption from specific sections of the Public Finance Management Act (PFMA).
On 31 March 2023, the Minister of Finance granted Eskom exemption from reporting irregular and fruitless and wasteful expenditure in its annual financial statements. The exemption, requested by Eskom, was intended to cover fiscal years 2022/23, 2023/24, and 2024/25. However, following widespread public outcry, the Minister withdrew the exemption on 6 April 2023. Although he responded to our question at a Standing Committee on Finance meeting that the exemption was off the table, it was not.
The subsequent gazette requested public comment on a proposed exemption. This revised exemption still appears to be an ill-conceived plan aimed at concealing vital financial information from auditors, with the hope of achieving better audit outcomes to improve Eskom's credit ratings and attractiveness to investors. This perplexing decision arises in a context where the South African government is already facing trust issues, as demonstrated by the recent grey listing by the Financial Action Task Force (FATF). The National Treasury seems to either overestimate rating agencies' gullibility or is desperate and out of touch. This error has significantly undermined the institution’s credibility as the guardian of public finances.
South Africa’s energy crisis can be attributed, in large part, to widespread and deeply entrenched bad faith, fraud, deliberate illegality, crime, and corruption. The exemption would only serve to further entrench criminality within Eskom and leave South Africans at the mercy of unscrupulous ANC politicians.
Despite massive public opposition, the government is persistent in its pursuit to exempt Eskom from financial scrutiny. The ANC clearly lacks a coherent plan to address South Africa's ongoing load shedding crisis and seems to be backtracking its position on unbundling Eskom - without a plan to unbundle the utility, failure is unavoidable. The government should prioritize and accelerate the unbundling process instead of fostering mismanagement through exemptions from scrutiny.
The DA urges the public to voice their concerns to Treasury by 21 April 2023. Comments can be sent to [email protected].
The DA is committed to holding National Treasury and Eskom accountable for its use of taxpayers' funds. We have already prepared legal documents to review and annul the exemption if the Minister proceeds with it.
South Africans deserve authentic commitment to combating corruption and maladministration, rather than half-hearted efforts masquerading as genuine action. This necessitates good governance, strong leadership, and decisive decision-making, which can only be delivered by a DA government.
Issued by Dion George, DA Shadow Minister of Finance, 19 April 2023
