“Privatisation of Eskom is the solution to this mess,” says Renaissance Capital Senior Economist Thabi Leoka.
To say that electricity is very important is an understatement. “A lot of damage is being done to our economy because of our electricity supply constraints,” says Leoka.
Privatisation a logical solution
Eskom has a shortfall of about R250-billion, according to Leoka. Others, such as former Eskom employee and mining analyst Ted Blom, estimate the shortfall at no less than R500-billion. “The most logical solution is to privatise Eskom and list it on the stock exchange,” says Leoka.
Private companies are more efficient and can more easily avoid political interference, says Leoka.
Privatisation and the developmental state perfectly suited
“Privatisation is completely suited to a developmental state,” says Leoka. “Our main impediment to growth is a shortage of electricity. If this shortage lasts another seven to ten years, as is being predicted, a lot of our big and small industries will be negatively impacted."
Leoka says many other developing countries have successfully privatised their state-owned entities.
“The only answer is to privatise,” warns Leoka.
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