Money is the problem

For the past two weeks media coverage has focused on the traditional “First 100 Days” of the Government of National Unity. Some publications have published “scorecards” of the various ministers, while others have focused on existing tensions between the ANC and the DA on some issues, such as the mayorship of Tshwane or the BELA Act.

All of this is interesting to read or to listen to pundits speculating on, but there are many more important issues that should be the focus of national attention. It is mostly on these issues that we are focusing our efforts in parliament because success on these will move the needle in terms of economic growth, creating sustainable employment opportunities and service delivery.

The first is the funding of critical state entities and agencies, such as Eskom, South African Airways (SAA) and regional water boards (such as Amathole Water Board or Umgeni Water Board). Water boards supply bulk water to municipalities, who owe them just over R10-billion currently.

Eskom is applying for total revenues of R446-billion for FY2026, R495-billion for FY2027, and R537-billion for FY2028. This translates to proposed average price increases for Eskom direct customers of 36.15% (1 April 2025 to 31 March 2026), 11.81% (1 April 2026 to 31 March 2027) and 9.10% (1 April 2027 to 31 March 2028). Understandably this has caused a firestorm of opposition because South Africans cannot afford any more price pressures on their income (inflation).

However, Eskom is also owed over R81-billion by municipalities who are generally unable to repay the debt. The rate at which many of them pay Eskom is far slower than the electricity they consume, so what is currently R81-billion will likely reach R100-billion within a year, and keep climbing unless multiple interventions are made.

Eskom is also not allowed to borrow (it already owes hundreds of billions to lenders anyways) in terms of the National Treasury’s rescue package. South Africans also hate bailouts, so Eskom is stuck between a rock and a hard place where South Africans want cheap, reliable electricity but do not want price increases, and municipalities are not paying for what they consume.

SAA exited business rescue not so long ago, and its recovery was premised on part privatisation. The “Takatso Deal” fell through in a sea of controversy. The end result is that SAA will not recover anytime soon. The government does not have the funds needed to fund its recovery plan. This means SAA Technical, which relies on servicing SAA aircraft, is also in the doldrums, just like AirChefs. Mango Airlines is supposed to be sold but has not yet been sold.

We have also seen a rise in extortion cases, which have reached epidemic proportions. This is in addition to other violent crimes such as robbery and murder. These make it very difficult to invest in businesses, especially in provinces such as the Eastern Cape where millions of people desperately need jobs.

This is just a small sample of the problems across the system, that in summary are:

• Several state-owned companies need tens of billions in funding, which is unlikely to come because the government is cutting budgets.

• Municipalities and metros are in crisis, causing a ripple effect on entities like Eskom and water boards – and the quality of life of South Africans.

• Our road and rail infrastructure needs urgent investment – and again the government does not have the kind of money we need for them to support the economy.

• Water supply shortages are now looming large as a problem that will be bigger than load shedding, especially that droughts are likely to be more frequent in future because of climate change.

• Crime is choking the economy and the lives of South Africans. It is nearly impossible to even think about starting a business in places like Mthatha.

The above is just a sample of problems we need to urgently solver over the next five years. Below are a few major policy issues that are important to track in government and parliament.

• The Medium Term Budget Policy Statement will be delivered by the Finance Minister at the end of October. We will get to see which of the above priorities get more funding, if any. The fight against crime – which includes the police, defence force, intelligence and the NPA must be prioritised.

• In light of the government’s inability to fund its own companies, we must accept now that private sector investment is inevitable. This means making the public aware of the rules that apply in such cases so that the public interest and benefit are protected.

• A recovery plan for municipalities. My view is that they will continue to be chaotic for a long time to come because their councils are elected bodies so the national government cannot arbitrarily dismiss them and take over. This is why the 2026 local elections are so important.

• A clear policy statement, perhaps in the 2025/26 Budget Vote from the Minister of Transport, explaining what will be done to revive our national logistics infrastructure, in particular shortage of funding.

• Provincial infrastructure plans will also be important because it is provincial and local roads that are falling apart, affecting business operations and the lives of South Africans. It is impossible to grow an economy without good rail and road infrastructure.

Again this is just a sample of major policy issues that we believe are important for the country to prosper socially and economically. Here is a link to our manifesto [https://www.risemzansi.org/policies] to see what we say on most of these issues – and it will continue to inform our contributions in parliament and elsewhere.

That said, it has become clear that after years of misrule and corruption, the country’s biggest problem now is finding more money to fund its aspirations. Because South Africans cannot afford an increase in personal income taxes, it leaves two choices on the table. These are more borrowing and private sector investment.

We must choose either one, or the best of a combination. Doing nothing is no longer an option.

Have a good week,

Songezo

RISE Mzansi National Leader