Renewable energy key to economic recovery – expert

With South Africa this week awaiting the economic reconstruction and recovery plan to be unveiled by President Cyril Ramaphosa, an economist has called on government to massively invest in the transition from coal-based energy to renewables.

Against a background of a battered economy, worsened by the adverse effects of the global Covid-19 pandemic, Ramaphosa will on Thursday address the joint sitting of parliament, ahead of Finance Minister Tito Mboweni’s tabling next week of his medium-term budget policy statement.

University of Stellenbosch sustainable development professor Mark Swilling has urged Ramaphosa to deliver “an economic strategy, with a very clear focus that unlocks the entire economy”.

Said Swilling: “Such a strategy and focus would generate massive confidence overnight, because the inability to generate security of supply and affordable electricity is the biggest obstacle to economic recovery.

“An economic policy that has a strategic focus to galvanise the whole nation, unlocking the biggest industrialisation programme since 1994, would immediately generate business, investor and labour confidence. That would most certainly touch every single household in South Africa.

“But, based on what I have already seen, my expectations are not too high, because the president could be talking gas and nuclear, with renewables shoved in the back pocket.”

Reflecting on government’s failure to implement its plans, included the reconstruction and development programme, Swilling said successive ANC-led administrations came up with policies that “never broke away from a political economy premised on the persistent unequal ownership of assets, with 90% owned by 10% of the population”.

“Added to this challenge has been the large number of people who are unemployed and low levels of economic productivity. “Also, deeply-rooted is the mineral energy complex, which we have never dismantled. Now we have to dismantle that, because all coal-fired power stations have to close down because they are old.

“Ramaphosa has an opportunity to break away from the political economy enclave that we have always been, by transcending the apartheid and colonial mineral-based complex,” said Swilling.

“He has a lot of room to manoeuvre. He is by no means using the space available to him and his leadership potential. The key is to break away from the refrain we have heard since 1994 that ‘we don’t have enough money’, when there is plenty available.”

Independent political analyst Dr Ralph Mathekga said what South Africans should be looking forward to hearing from Ramaphosa was whether there would be “a new approach in implementing the policy”.

“It is no longer about substantive matters of the plan, but about how it is going to be implemented. It has to be different from other plans we have seen, some of which were never implemented.

“It is also going to be about the capacity of the public service to implement policy, instead of promising new things,” said Mathekga.

Dr Nthabiseng Moleko, senior lecturer in economics and statistics at the University of Stellenbosch, said: “What you need is a decisive macroeconomic intervention in the economy that will lead to different economic outcomes and a clear breakaway from the current slow growth path.

“That would require decisive action, leadership and a very different type of economic instrument.”

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