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South Africa’s president says shaky power utility can’t fail

June 20, 2019
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South African President Cyril Ramaphosa arrives to deliver his State of the Nation Address at parliament in Cape Town, South Africa, Thursday, June 20, 2019. (Sumaya Hisham/Pool Photo via AP)

CAPE TOWN, South Africa (AP) — South Africa’s president declared Thursday the country’s struggling state-owned power utility Eskom “cannot be allowed to fail” and said he wants more funding to keep it afloat after its cash runs out in October.

President Cyril Ramaphosa in his first State of the Nation address since last month’s election acknowledged “enormous and severe challenges” including the economy’s sharpest decline in a decade.

That first-quarter drop of 3.2% was blamed largely on widespread power outages under Eskom, which supplies about 95% of South Africa’s electricity and relies on the government to help service its $30 billion debt. The country’s economy, the most developed in sub-Saharan Africa, also has seen declines in key sectors such as mining, manufacturing and agriculture.

Ramaphosa said his government would table an urgent bill to allocate Eskom a “significant portion” of the 230 billion rand ($16 billion) it needs over the next decade earlier than planned, calling the utility “too vital to our economy.” He urged South Africans to pay their power bills and do their part.

The president also declared a “relentless focus on economic growth” in a country with 28% unemployment, noting that growth this year is now projected to be lower than anticipated. More than 50% of young people are unemployed, and Ramaphosa wants at least 2 million jobs created for them within the decade.

Public dissatisfaction with the economy and corruption led to the ruling African National Congress party’s 57.5% electoral victory, its weakest showing since coming to power in 1994 after the end of the harsh system of racial discrimination known as apartheid.

Ramaphosa in his address to parliament called for a focus on creating jobs, improving education, reducing hunger and inequality and halving violent crime over the next decade.

He also made an unusual call to construct “the first entirely new city built in the democratic era,” saying the dream was sparked by conversations with a handful of “wonderful” people including Chinese President Xi Jinping and his account of building a new city outside Beijing.

“Has the time not arrived for us to be bold and reach beyond ourselves and do what we believe is impossible?” Ramaphosa asked, saying some 75% of South Africans will be living in cities by 2030 as people continue to migrate from rural areas. His comments drew loud murmurs from lawmakers and questions afterward about who will pay.

The reference to China in the high-profile speech came a day before the United States’ top diplomat to Africa, Tibor Nagy, will make a speech in Johannesburg on U.S.-Africa diplomacy at a time when the U.S. is trying to counter the growing influence on the booming continent of China, Russia, Gulf countries and others.

On the sensitive issue of land reform to help address South Africa’s long-standing inequalities, Ramaphosa said a much anticipated report by an advisory panel had been received and will be presented to the Cabinet for consideration. In the meantime, he said, government would begin to release state-owned land for home construction and farming.

South Africa’s top opposition parties said Ramaphosa’s speech lacked details and a clear plan.

Julius Malema with the Economic Freedom Fighters said the address was too imaginative and avoided the land question, while Mmusi Maimane with the Democratic Alliance said it was vague on how to turn South Africa’s economy around. Declaring 10-year goals “means very little to people who desperately need immediate change,” Maimane said.

Ramaphosa, who first took office in February 2018 after the ANC forced scandal-plagued former President Jacob Zuma to resign, again said corruption had no place in his government and that “we need to ensure that public money stolen is returned” and used to provide basic services to the people.

A widely watched commission of inquiry into graft during Zuma’s administration wants the former president to appear before it and answer questions next month but on Thursday said that Zuma was not entitled to request the questions in advance.

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Magome reported from Johannesburg.

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