By Gilbert Mosena
Access to food, water, and electricity are basic human rights. While many may have been shocked by the violent protests of the past couple of weeks, whether instigated or otherwise, I honestly believe that it was a long time bomb waiting to explode at the slightest spark.
The fact is that we are acutely aware of many socio-economic challenges the majority of South Africans, and blacks in particular, face on a daily basis, and the access to basic foods and services are a struggle for most.
For the youth of our country, both school-goers and job seekers, the inaccessibility to these basics can be a productivity killer as they struggle each day to achieve their potential because the odds stacked against them are so high.
The case for energy security
Even with the best will in the world, energy security risks in SA, with the consequential implementation of load shedding, means no lights to study; no connectivity to access opportunities, information or people; no heating for houses; and limited opportunities for cooking and food preservation. In addition, it is an impediment to continue with the existing business investments, new business investments and economic growth.
Underpinning this structural injustice are two core crises that the State must address head-on to ensure a return to the period of economic growth it enjoyed two decades ago, namely energy security and employment creation. It is well established that these two are indelibly linked.
Africa’s population is among the fastest growing and youngest in the world – with every second person added to the world’s population between 2014 and 2040 predicted to be African. The energy implication of such large-scale growth is obvious – exploding demand unlikely to be matched by supply availability unless new initiatives and technologies are positively considered and implemented.
The key challenge, however, is how to reconcile the burgeoning demand for power against an ageing grid system that can only provide a limited and unstable supply of electricity. South Africa needs to smell the coffee and embark on a futuristic energy investments now than later.
Load shedding – the not so silent killer
According to the Council for Scientific and Industrial Research (CSIR), power cuts cost the South African economy as much as R118 billion in 2019 alone. As we saw first-hand over the past few months, load shedding is not a cost the economy can or should continue to bear, especially as SMEs now routinely shut down and some will never be expected to re-emerge.
A recent report from PwC suggested that the continued trajectory of load shedding would result in halved GDP growth in 2021, and ultimately directly cost the country 275 000 potential jobs. The report added that the country had experienced a collective 859 hours of load shedding in 2020, which according to the firm’s calculations, had cost the country an estimated R75 billion in lost GDP.
This economic carnage continued into the first half of 2021, with an estimated 70 (eight hour) business days lost due to load shedding. This, for an economy already in a recession in 2019 and then faced with a global pandemic and ensuing lockdowns, is untenable.
Unless we stop being distracted by politicking and personal agendas and prioritise urgently solving South Africa’s energy insecurity issues, we risk finding ourselves in a position it takes three or four more decades to solve.
Limited electricity means limited economic growth. Our SMEs are already on their knees, established corporations are in cost-cutting mode and our unemployment rate escalates unabated. Our government recognises the crisis and understands what effective strategies can be deployed in the short term to start mitigating South Africa’s downward trajectory.
This is why the Risk Mitigation Independent Power Procurement Programme (RMIPPPP) was implemented by the Department of Mineral Resources and Energy (DMRE).
Disillusion, destruction and despair of black businesses
Even before the Covid-19 pandemic hit South Africa, unemployment was a burning issue, especially for our youth. The national lockdowns, albeit necessary, have exacerbated joblessness and pushed our people to the brink. The recent unrest in KZN and Gauteng only served to worsen the situation, with an estimated 150 000 jobs lost.
The impact has been severe. Most of the SMEs were hit hard by Covid-19 even before the looting spree. As much as one talks about the resilience of entrepreneurs and the hopes that they will bounce back, the reality is that some of them will not be able to.
Economist Thabi Leoka says that South Africa lost more than 1.4 million jobs since the lockdown began in March 2020. She says that an increase in job losses is expected because of lockdown restrictions and the effects of civil unrest.
We must create as facilitative an environment as possible if our businesses are to sustain themselves, and while there are multiple policy reforms required, these take time. What we can do, though, is take quick decisions that make it easier to operate by eliminating some of the infrastructural challenges that hamper their day to day – like load shedding.
Rebuild together and emerge stronger
South Africans across all divides have demonstrated their early resilience in the face of the protests and taken active accountability in reversing its ravages. The images and videos circulating on social media showing groups of concerned citizens, and in some cases entire communities, contributing food and cleaning up the streets has been deeply inspiring.
But it doesn’t end there. Our country needs working infrastructure – reliable, accessible running water and power. Energy security is the foundation of a sustainable economy and it is critical for our country to fast-track the implementation of the RMIPPPP.
Given that sustainable development is a national priority, it is regrettable that government departments are not aligned to this concept. A case in point is the Karpowership SA projects in the ports of Saldanha, Coega and Richards Bay – three projects that will provide a total of 1220 MW to the grid.
The company is currently appealing the decision by the Department of Forestry, Fisheries and the Environment (DFFE) that refused their applications for the environmental authorisations at all three ports. This decision seems to have been made in isolation from the DMRE’s RMIPPPP, a process informed by the Integrated Resource Plan of 2019 that supports a diverse energy mix, including liquefied natural gas, which is what the Powerships will utilise to generate electricity.
When making far-reaching decisions on alleviating the energy crisis, the minister must holistically consider the sustainable development needs of the country to achieve a win-win for both the environment and the economy.
As the National African Federated Chamber of Commerce and Industry (NAFCOC) and through our energy sector affiliates, we have engaged the company extensively and scrutinised their environmental impact assessments. They are continuing to engage with variety of stakeholders across all three regions of their proposed project sites, including representatives from small businesses, labourers, environmental and fishing communities directly. The specialist reports that we have studied indicate that there are no fatal flaws to the implementation of the projects.
Karpowership SA has committed to spending substantial amounts both during their construction period and operations, whilst in the process creating hundreds of jobs. It is clear that a rejection of these projects will be the death knell for immediate economic development and job creation in the country and certainly impact our continued ability to attract foreign investments.
As the largest, oldest and highly affected members based chamber of commerce and industry, we appealed for both the government of the people and future-loving citizens to consider or reconsider positively the decision on the EIA for these projects.
To see South Africa achieve its goal of a sustainable and lasting energy solution, we need to be practical and act decisively. The Minister holds the key and the time to save our country is now and not tomorrow.
The RMIPPPP process was exceedingly transparent, strategic and fit-for-purpose. All the preferred bidders shared the same objective – establishing a secure, stable, affordable and cleaner grid that will create jobs and put South Africa on the road to economic recovery.
Are we losing the plot?
* Mosena is the acting President of NAFCOC, former Vice and Acting President of the Black Business Council (BBC) and President of the South African Mining and Energy Chamber.
** The views expressed don’t necessarily reflect those of IOL