Finance Minister Enoch Godongwana’s action plan for Eskom’s debt is among the top themes expected in this week’s Medium-Term Budget Policy Statement.
Godongwana will deliver the budget on Wednesday at a time when the South African economy is in a precarious state.
South Africa battles record unemployment, the rising cost of living compounded by the rampant power outages – which have seen multiple rounds of load shedding in recent weeks.
Godongwana could announce the government’s plan to take on Eskom’s R400 billion debt into its own balance sheet as a way of providing relief for the ailing power utility.
But Investec chief economist Annabel Bishop said that would not go without consequence.
“It would not really change our credit rating. What the effect would really be is that we would find ourselves in a situation that would become enticing or other SOEs to look for similar [relief measures].”
If the government takes on Eskom’s debt that would add to the country’s already ballooning bill Godongwana is also expected to address on Wednesday.
The Congress of South African Trade Unions is among those calling for a debt relief package for the power utility, saying the South African economy cannot recover without reliable and affordable electricity.
-EWN
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