JOHANNESBURG – While many speculate on how Finance Minister Tito Mboweni will handle Eskom in his budget there are concerns around how the rating agencies will react to what’s likely to be another massive bailout.
Mboweni will deliver what is said to be one of the country’s most difficult budgets yet on Wednesday.
In his State of the Nation Address, President Cyril Ramaphosa announced the unbundling of Eskom into three entities which alliance partners are against.
Trade union federation Cosatu will on Monday morning meet with the president to discuss their objections.
Finance Minister Tito Mboweni will deliver his budget speech this week which will likely give clarity around his rescue plan for Eskom and the possible absorption of some of its debt by government.
Economist Goolam Balim says that Mboweni is also tasked with keeping the rating agencies happy.
“We think that there should be a red line that would invoke the ire of the rating agencies and precipitate a ratings downgrade.”
Political analyst Xolani Dube says whatever Mboweni announces this week, it won’t stop Eskom from being privatised in the future.
“Lots of people are going to lose jobs. NUM, Cosatu and others after the elections, they will sit around the table and they won’t buck in [sic].”
Meanwhile, South Africans face another uncertain week after several days of loadshedding due to what Eskom says was finished capacity.
Police won’t be drawn on weekend reports that officers will be deployed to power facilities to safeguard against sabotage.
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