• Business leaders have expressed concerns that government is overstepping by implementing a state of disaster.
• Business Leadership South Africa says government could accomplish what it needs to without the declaration.
• Despite the concerns, businesses are also ready to help where possible.

On Thursday evening following a delay caused by none other than the Economic Freedom Fighters, President Cyril Ramaphosa delivered the State of the Nation Address for 2023.

Much of the focus of that address has rightly been on the declaration of a State of Disaster to deal with the ongoing energy crisis.

“The state of disaster will enable us to provide practical measures that we need to take to support businesses in the food production, storage and retail supply chain, including for the rollout of generators, solar panels and uninterrupted power supply,” Ramaphosa said.

The president went on to say that National Treasury is working on adjustments to the bounce-back loan scheme to help small businesses invest in solar equipment, and spur along the market for the leasing of solar panels at banks and development finance institutions.

While this is good news, there is worries that the State of Disaster will simply lead to yet more looting from the side of government.

Among those who have spoken out is Matthew Cruise, head of business intelligence at Hohm Energy.

“I have my concerns about this step, and previously voiced concerns that it won’t do much in terms of actually bringing new generation capacity onto the grid, which is what’s primarily needed in order to meet our electricity demand, And looking at how it went with the pandemic, can we really say that it was a successful endeavour? Switching to a national state of disaster, do we know with confidence that the money that flowed from it was well spent? Meanwhile, we know that R500 billion has been investigated for misappropriation or disappearance as a result, so I am concerned about the efficacy of declaring a national disaster,” the head of business intelligence said.

Continuing, Cruise refutes Ramaphosa’s prediction that the energy crisis will lessen over the next 12 months.

“My projection is 100 percent that we will not have a reduction of loadshedding within this year, but it will actually increase by about 50 percent this year alone,” says Cruise.

Business Leadership South Africa (BLSA) has expressed similar concerns regarding the reach that government now has.

“Delineating clear responsibilities will be important, particularly between the ministers of energy and electricity,” the organisation said in a statement.

While BLSA is encouraged at the news of a new electricity minister, it believes that government could take the measures it needs without having to declare a State of Disaster.

“It’s important, therefore, for government to limit the use of the extra powers it has granted itself purely to address the loadshedding crisis on a least-regret basis. If used responsibly and effectively though, the state of the disaster, along with the new electricity minister driving the energy reforms, do offer hope of faster implementation of the measures needed to end loadshedding in the short term and secure our energy supply over the longer term through increased generation capacity,” said BLSA.

While there is hesitation in the air, there is also a willingness to help from both BLSA and Hohm Energy.

“What was exciting to hear is that residences and businesses are being incentivised through tax incentives to get solar. This is exciting because it’s one of the quickest ways to get power onto the grid by incentivising the mass public to get solar installations. This is an exciting progression that is taking place, but it was previously indicated in July 2022 last year, so we’ll have to wait to see when things will actually get implemented,” Cruise said.

Chief executive officer of Liquid Intelligent Technologies, Deon Geyser, was similarly supportive of efforts to resolve the crisis.

“Liquid Intelligent Technologies stands ready to partner with the government to address the country’s critical infrastructure challenges and find solutions that reduce the impact of power outages. We agree with the president that the country’s most immediate priority is to secure energy security and as Cassava Technologies’ subsidiaries we at Liquid Intelligent Technologies and Distributed Power Africa (DPA) will play our role in helping to deliver this agenda,” says Geyser.

The country will now look toward the Presidency, the Department of Public Enterprise and the Department of Cooperative Governance and Traditional Affairs to sail South Africa out of this crisis.

Citizens and businesses are likely to keep a keen eye on government over the period that the State of Disaster is in effect and we expect many declarations to be challenged in court. The Democratic Alliance said it will challenge the State of Disaster in court shortly after the address concluded.

You can read the declaration of the State of Disaster in the embedded PDF below.

[Image – Anil Xavier on Unsplash]