[Letter] Moving the goalposts

That finance minister Enoch Godongwana has granted both Eskom and Transnet exemptions from regulations under the Public Finance Management Act regarding disclosing of any irregular and fruitless and wasteful expenditure in financial statements, is the latest example of the argument that the state at present will seek to move the goalposts as much as possible, instead of allowing real competition in the relevant sectors.

The majority of state-owned entities (SOEs) don’t have the incentives to improve performance; for the current ruling party it serves the interests of influence and cadre networks better to give SOEs more leeway in their operations and finances — under the umbrella of ending the electricity state of disaster — instead of moving quickly enough to bring in new competition, investment and the building of generation capacity necessary to end load-shedding.

One fervently hopes to be proven wrong in this regard, but it is unclear (to put it mildly) that the ideology, policies, systems and incentives that necessarily produced state capture have somehow disappeared, and that similar levels of corruption are not taking place right now.

The exemptions approved by the minister could prove to be effective and not abused, but even the initial reaction points to the trust deficit between citizens and government. The chasm could yet widen, with concomitant effects to be felt in the 2024 general election.

Letter originally published here.