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Parallel executives make for difficult diplomatic relations

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By Dr André Thomashausen

In 2017, Cyril Ramaphosa was the dream candidate of the EU. He simply could do no wrong.

Every EU Ambassador in Pretoria praised him as the one who would save the country from its abyss of the “lost Zuma years”. Angela Merkel from Germany, especially, included Ramaphosa in her most strategic “compound” plans and walked him holding hands into high-level meetings that were closed to other African leaders.

Ramaphosa, now approaching the end of his first term in office, appeared on March 6 on the national broadcaster’s cameras late, worn out and hesitant. He announced ministerial portfolio rotations and added four new “ministers in the Presidency” to a large presidential team of about 50, who form a de facto parallel government that the Constitution never envisaged.

For the diplomatic community in Pretoria, it is difficult to deal with two parallel executives. For international relations, presidential adviser Bejani Chauke, the 2017 nomination campaign manager of Ramaphosa, is the “invisible” minister of international relations. Cabinet minister Naledi Pandor is hardly ever informed of Chauke’s deals and commitments that he makes during travels, whether to Mozambique, Saudi Arabia, Russia, Spain, Nigeria, Rwanda, Cameroon, Gabon, Chad, DRC, CAR, Equatorial Guinea, Guinea Conakry, Gabon, Egypt or Morocco.

Chauke, together with his business partner, Nkuli Moyo, has eroded South Africa’s foreign affairs credibility. The country’s stance on all major international challenges is perceived as unreliable and vacillating, from the Ukraine to Israel, from Palestine to Kashmir, or Cuba, Rwanda, DRC, Iran.

Nobody knows who will determine South Africa’s chairmanship of the BRICS, Chauke or Pandor. A crucial turning point for the BRICS lies ahead with the possible accessions of Saudi Arabia, Algeria and Turkey and maybe others more. Will South Africa be ready, willing and able to seize the opportunity of giving birth to a future BRICS that could grow to balance out the hegemony of the EU and Nato? Russia and China are concerned. Russia has been waiting months for at least a small courtesy reply to its formal offer to assist South Africa during its energy emergency. Russia offered in vain to dispatch a few hundred thermal power station experts, to help restore the reliability of Eskom’s electricity generation.

China’s good will is being tested by the unwillingness of the South African president to put an end to the ugly spat and petty judicial quarrels that have immobilised more than 500 brand-new Chinese locomotives, or to end the bitter platinum feud between feuding BEE partners of China’s largest state-owned mining company, the Zijin Mining Group. Not to mention that hundreds of young medical doctors who were given bursaries to study and qualify in China, are refused accreditation and are prohibited from working in South Africa by the South African regulator, the Medical and Dental Professional Board. China perceives this as a hostile and insulting conduct by its BRICS partner.

The pillars of the old stalwart power in the ANC, led by ministers Gwede Mantashe, Pravin Gordhan and Bheki Cele were left untouched by the Cabinet reshuffle. This comes as a shock to diplomats from East to West. These are the ministers who are responsible for the dramatic decline of the mining industry, the bankrupting of all relevant state-owned enterprises, including the Post Office and what was once one of the world’s best airlines, SAA, and, finally, in the case of Cele, the absurd rise in crime and a growing threat of anarchy.

The newly appointed electricity minister in the presidency, Kgosientsho Ramokgopa, is a civil construction engineer and holds a PhD in public administration from the University of Pretoria, a predominantly Afrikaans institution. Only his good intentions qualify him to salvage one for the world’s large and complex public power utilities. Eskom has accumulated an immense R400 billion (at least €25bn) in debt and cannot find money to buy spare parts. Ramokgopa is known as “Sputla”, after he, as a teenager in Atteridgeville, demonstrated a great ability in soccer – to run faster than others. The question that foreign correspondents and analysts are asking is: How fast will he run when the electricity grip collapses?

Immediately after the announcement of the new executive appointments, Ramaphosa’s brother-in law, Patrice Motsepe, South Africa’s first business champion, reminded the public that only the recruitment of the best managers available globally and an uncompromising war on corruption, could save South Africa’s key industries. The statement is a stark dismissal of the choices made by Ramaphosa. Motsepe, as a major mining investor, knows only too well that consumers in Russia pay $0.06 (R1.11) per kwh with zero blackouts (with a maximum total corporate tax rate of 20%), as against R2.40 per kwh with eight-hour blackouts in every 24 hours in South Africa. In Iran, with a national economic framework comparable to South Africa, consumers buy reliable electricity at R0,18 per kwh.

Ramaphosa paid for the support he received in 2017 from the Europeans, with the endorsement of especially Germany’s ambition to pioneer “energy transition” in third countries, especially in South Africa, a country that contributes only 1.09% to the world’s carbon emissions.

In order to accelerate the installation of imported solar and wind farms, Eskom was decapitalised so that it would no longer be able to maintain its fleet of coal-fired power stations. The decapitalisation was achieved by allowing municipalities to never pay for electricity consumed, accumulating within Eskom over R56bn in unrecoverable debt.

The other decapitalisation policy designed to collapse the coal-fired national grid in favour of “energy transition”, was to force Eskom to enter into long-term power purchase agreements with producers of “renewable” energy at an early stage, when such energy was exceedingly expensive.

Eskom spends about 25% of its income on the purchase of “renewable energy” which makes up barely 5% of its energy production. Any business that spends 25% of its disposable income on generating a mere 5% of its sales, will be doomed. But the reality is even worse. The imperative back-up power for the renewable energy consumes some R52bn annually, mainly because the power is produced with diesel-fed Open Cycle Gas Turbines, at a cost of R9.30 per kwh. The resulting permanent power cuts since September last year have cost South Africa a 1.3% decline in gross domestic for the last quarter in 2022.

Germany, the EU and the US reject the accusation that their determination to combat global warming could be responsible for South Africa’s demise. In the words of a retired but most senior German diplomat: “South Africa is an equal and independent partner in the international community of states. It is the responsibility of its government to determine the feasibility and pace of energy transformation and to resist undue or ruinous pressures.”

The well-articulated point David Pilling made in the Financial Times is that South Africa cannot continue administering poverty without a viable recovery and development plan. On March 6, Ramaphosa formalised the appointment of Paul Mashatile as deputy president, as determined by the 55th Conference of the ANC last December. Mashatile has thus been placed in the position of Ramaphosa’s successor.

On March 8, Standard & Poor’s, the world’s top rating agency, reacted by lowering South Africa’s credit rating outlook from positive to now merely stable but affirmed the long-term foreign and local currency debt ratings at BB- and BB, respectively. South Africa, and the world, will look brighter post Ramaphosa.

*Andre Thomashausen is a German attorney and Unisa Professor Emeritus for International Law.