Analysts have assessed Finance Minister Enoch Godongwana’s 2023 budget as “credit neutral”.
But “neutral”, especially in the wake of an economic crisis, is not always good — and Godongwana has again been criticised for toeing the line to appease creditors to the detriment of the poor.
By far the biggest reveal on Wednesday was the treasury’s decision to relieve Eskom of 60% of its debt, a move that ought to give the utility much-needed room to manoeuvre as it helps navigate the country out of its energy crisis.
The government will provide Eskom with debt relief amounting to R254 billion over the next three years and will also take over up to R70 billion of the utility’s loan portfolio directly in 2025/2026.
The debt takeover plan comes with a number of strict conditions, including restricting Eskom’s capital expenditure to transmission and distribution and forbidding the utility from implementing remuneration adjustments that risk its overall financial position. Eskom will also not be allowed to engage in new borrowing or to use the proceeds from the sale of its non-core assets for its operating needs.
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Sarah Smit
Sarah Smit is a general news reporter at the Mail & Guardian. She covers topics relating to labour, corruption and the law.
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