ANALYSIS: SA turns right as Ramaphosa hands economic levers to the private sector
President Cyril Ramaphosa's recent weekly newsletter emphasized the need for privatization, specifically advocating for the unbundling of Eskom to increase competition and reduce costs for consumers. This aligns with broader trends since 2019 of transferring control of key sectors like energy and transportation to the private sector. The timing of the newsletter coincided with Eskom's announcement of consecutive profitable years and a reconciliation with Business Leadership SA regarding the unbundling process. Critics argue that this shift weakens state control over critical infrastructure, echoing historical patterns of state-led industrial development during the colonial and apartheid eras. Opposition to these reforms has been minimal, with only the Economic Freedom Fighters (EFF) and uMkhonto weSewu (MK) expressing concerns, though neither has mounted significant policy responses. The ruling African National Congress (ANC) is preoccupied with internal factional struggles, and traditional allies like the South African Communist Party (SACP) and Cosatu have not actively challenged the privatization agenda.
Dr Kgosientsho Ramokgopa, South Africa's Minister of Electricity and Energy, has firmly defended the ongoing efforts to transform Eskom, the country's primary electricity provider, rejecting criticism and highlighting the achievements made thus far. Speaking at an event in Johannesburg hosted by the Black Business Council and the Guma Group in November 2025, Ramokgopa emphasized that black professionals are leading the transformation of Eskom, describing them as exceptionally qualified, competent, and patriotic individuals committed to addressing the nation's most pressing challenges. Ramokgopa stated that despite the recent announcement of a R30.3-billion profit for the last financial year, Eskom faces significant structural liabilities, governance issues, and criminal threats that question its long-term sustainability. Municipalities account for nearly half of Eskom's sales, but persistent non-payment remains a systemic issue. By the end of the previous financial year, gross municipal arrears had risen by R17 billion to R111.6 billion, continuing to climb to R119.9 billion by June 2026. Eskom's outgoing Chief Financial Officer, Calib Cassim, disclosed that R15.8 billion in billed revenue had to be excluded from the company's income statement due to uncollectibility. Under the National Treasury's municipal debt relief program, R3.6 billion was written off during the year, with an additional R4 billion planned for the following fiscal year. These arrears are blocking the legal separation of Eskom's distribution division, preventing it from proceeding with corporatization as the National Electricity Distribution Company of South Africa. Without intervention, these debts are projected to balloon to R358 billion by FY2031. A key component of the electricity supply industry reform involves the unbundling of Eskom's vertically integrated structure into specialized subsidiaries and the establishment of an independent state-owned Transmission System Operator. The National Transmission Company South Africa (NTCSA) has operated as a fully owned subsidiary of Eskom since July 1, 2024. However, the financial statements reveal substantial costs, accounting difficulties, and financial risks tied to this restructuring. Eskom's investment in NTCSA rose by R4.2 billion, increasing from R26.3 billion in FY2025 to R30.5 billion in FY2026, primarily due to government debt relief being converted into equity. Despite this, NTCSA, along with generation and distribution units, continues to be classified as a single cash-generating unit. This classification is due to the heavy reliance of NTCSA's cash inflows on electricity sold at a single regulated rate set by the South African energy regulator, Nersa. Consequently, NTCSA's cash flows remain tightly linked to other divisions. Transferring transmission assets poses significant tax challenges. If de-grouping happens within six years of the asset transfer, it could trigger a deemed disposal and capital gains tax for Eskom. Legal separation requires prior approval from lenders, and the transfer of assets activates protections outlined in Section 7 of the Eskom Conversion Act, potentially affecting lenders' willingness to fund the Eskom group unless carefully managed. President Cyril Ramaphosa has intervened in the debate surrounding Eskom's assets, aiming to ease tensions between the government and private sector stakeholders. His weekly newsletter, released alongside Eskom's annual results and a joint statement with Business Leadership South Africa indicating reconciliation over the unbundling process, underscored his support for breaking up Eskom. Ramaphosa drew parallels to the liberalization of the telecommunications sector, which introduced competition and reduced costs for consumers. Ramaphosa's advocacy for unbundling reflects a broader trend of opening up previously state-controlled sectors to private enterprise. This includes areas such as Eskom and Transnet, where private involvement has reportedly enhanced service delivery. Critics argue that this approach shifts economic power away from the government, with some suggesting that initiatives like Operation Vulindlela aim to bolster private sector influence at the expense of state control. The transition has occurred with minimal resistance, partly due to the weakened state capacity resulting from the governance failures under former President Jacob Zuma. The era of state capture, marked by significant mismanagement and corruption at Eskom and Transnet, contributed to the decline of essential public services. As a result, the current administration finds itself navigating a landscape where private sector engagement is increasingly necessary to maintain operational continuity and service quality.
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President Cyril Ramaphosa's recent weekly newsletter emphasized the need for privatization, specifically advocating for the unbundling of Eskom to increase competition and reduce costs for consumers. This aligns with broader trends since 2019 of transferring control of key sectors like energy and transportation to the private sector. The timing of the newsletter coincided with Eskom's announcement of consecutive profitable years and a reconciliation with Business Leadership SA regarding the unbundling process. Critics argue that this shift weakens state control over critical infrastructure, echoing historical patterns of state-led industrial development during the colonial and apartheid eras. Opposition to these reforms has been minimal, with only the Economic Freedom Fighters (EFF) and uMkhonto weSewu (MK) expressing concerns, though neither has mounted significant policy responses. The ruling African National Congress (ANC) is preoccupied with internal factional struggles, and traditional allies like the South African Communist Party (SACP) and Cosatu have not actively challenged the privatization agenda.
Bias read (Conservative): The article frames the privatization of state-owned enterprises as a positive step toward economic growth and efficiency, using historical comparisons to highlight the perceived benefits of reducing state control. It emphasizes the 'free market' narrative and portrays the ANC's shift toward privatiz
Why factuality (75): The article accurately reports the content of Ramaphosa's newsletter, including his advocacy for unbundling Eskom and the comparison to Telkom's liberalization. However, it omits key details from the primary source, such as the emphasis on making electricity 'affordable' and 'clean,' and the mention
Why objectivity (60): The article presents a clear ideological perspective favoring private sector involvement, using phrases like 'strongest gesture of support for a free market economy' and suggesting critics might view the reforms as 'weakening the state.' While it cites events from the newsletter, it frames them thro
Dr. Kgosientsho Ramokgopa, South Africa's Minister of Electricity and Energy, addressed concerns about Eskom's turnaround efforts, emphasizing the role of black professionals in leading the transformation. During a speech in November 2025, he highlighted the progress made in addressing critical issues facing South Africa's power sector. However, despite Eskom's reported profit of R30.3 billion for the previous financial year, underlying challenges remain, including significant structural liabilities, governance issues, and criminal threats to the utility's stability. Municipalities, which account for 44% of Eskom's sales, continue to struggle with paying their bills, resulting in a growing arrears debt of R119.9 billion by June 2026. This debt hinders Eskom's ability to separate its distribution division legally. Additionally, the implementation of the Electricity Regulation Amendment Act aims to restructure Eskom into specialized subsidiaries and establish an independent transmission operator, though this process involves substantial financial and operational complexities.
Bias read (Center): The article presents both the minister's claims regarding Eskom's progress and the ongoing challenges faced by the utility, including financial and governance issues. It does not exhibit clear bias toward either positive or negative framing of the situation, providing a balanced view of the current
Why factuality (65): The article accurately references the event hosted by the Black Business Council and Guma Group, and quotes Dr. Ramokgopa's speech. However, it introduces new information not present in the primary document, such as the 'R30.3-billion' profit figure and details about municipal debt, which were not m
Why objectivity (55): The article exhibits a clear bias towards highlighting the challenges facing Eskom, such as municipal debt and structural liabilities, even though the primary source focuses on celebrating the leadership and achievements. This creates a one-sided narrative that contrasts with the celebratory tone of
The article discusses President Cyril Ramaphosa's intervention in a growing conflict regarding Eskom assets, South Africa's state-owned electricity utility. The situation highlights tensions around the management and control of critical national infrastructure. Ramaphosa's involvement suggests an attempt to mediate or resolve disputes that could impact the country's energy sector and broader economic stability. The 'cold war' metaphor implies a deepening divide between different factions or interests vying for influence over Eskom. This development has significant implications for governance and public services in South Africa.
Bias read (Center): The article presents an analysis of a politically charged issue involving high-level government intervention. However, it does not exhibit clear bias toward any particular side, focusing instead on describing the situation and Ramaphosa's role without overtly favoring one faction over another.
Why factuality (60): The article lacks specific details and appears to be an incomplete analysis. The title suggests a political development, but the content is cut off, making it difficult to assess factual accuracy. There is no clear reference to a primary source or detailed explanation of events.
Why objectivity (65): The tone leans towards political commentary, suggesting a potential bias toward portraying Ramaphosa as mediating a conflict. While not overtly partisan, the phrasing 'warm up cold war' implies a narrative that may not be neutral.
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