By Daanyaal Matthews

Minister of Finance Enoch Godongwana | Source: GovernmentZA via Flickr

A Government Gazette has sparked discontent across the Republic as Minister of Finance, Enoch Godongwana, has exempted Eskom from reporting any irregular expenditure, and fruitless and wasteful expenditure, that occurs from now until the financial year of 2024/2025.

This exemption, which directly contravenes Section 55(2)(b)(i) of the Act and Treasury Regulation 28.2.1, has been criticized by trade unions, civil organizations, and political parties, with many feeling that the exemption is merely a way for Government to hide the corrupt acts taking place at the State-Owned Enterprise, thus making Eskom exempt from accountability.

CEO of the Organization Undoing Tax Abuse (OUTA), Wayne Duvenage, says,

“These [being reports on irregular expenditure, fruitless, and wasteful expenditure] are matters that are so important to oversight bodies, to civil societies, and it doesn’t help when a state-owned entity, which is in the trouble that we know Eskom is in, to escape having to report on matters like this. This is not good for governance.”

This assertation that exempting Eskom from reporting financial irregularities, fruitless, and wasteful expenditure, is an attempt to hide corrupt acts being conducted at the SOE has been furthered by SAFTU’s spokesperson Trevor Shaku, who says that this is in line with a pattern of the ruling party to conceal corruption:

“In our view, this exemption of Eskom from disclosing the wasteful, irregular and fruitless expenditure in its financial statements, is an attempt by the ANC government to conceal the gross mismanagement, incompetence and corruption at Eskom from the public. This move does not surprise us. It is in line with their collective attempt to block any accountability on Eskom corruption and mismanagement; corruption and mismanagement that have consequently brought loadshedding and continue to create conditions for implementation of loadshedding into the future.”

In response to criticism the National Treasury has clarified that the exemption is ‘partial’ and still requires the State-Owned Enterprise to disclose financial irregularities, wasteful, and fruitless, expenditure in its annual report.

The National Treasury argues that by not including financial irregularities in Eskom’s annual financial report, but including it in its annual report, the SOE circumvents the risk of Eskom’s cost of borrowing being increased in reaction to financial reports but still maintains transparency as financial irregularities would still need to be disclosed in the State-Owned Enterprises annual report.

Political Analyst, Andre Duvenage, has argued that this exemption will more than likely trigger a series of court cases from both political parties and civil organizations stating:

“I cannot see that opposition parties, and groups from civil society, will leave it there. I think we can expect court cases, it’s a bit of irony that at the same time the electricity prices are rising by 18%. What a contradiction, what a pity, that we have a Government like this, claiming the moral high ground and want to govern post 2024, doing what they are doing, and still the President is quiet.”