Policy uncertainty and inconsistency continues to be the biggest factor cited for the low levels of domestic and foreign investment, according to Martin Kingston, vice president of Business Unity SA (BUSA).
He was commenting on a Nedlac executive council meeting with Minister of Energy Jeff Radebe.
Kingston pointed out that ratings agencies Moody’s Investor Services, Fitch Ratings and S&P Global Ratings have equally noted how policy uncertainty has undermined South Africa’s efforts to attract investment.
“Indeed, existing investment and jobs are put at risk and new investment is compromised,” said Kingston.
He added that energy is a critical input to the economy, and there is significant scope in this sector to create new skills and viable job opportunities. That is why, in his view, the urgent finalisation of the energy blueprint is very important.
“Business looks forward to the tabling of the revised versions of the Integrated Energy Plan (IEP) and the Integrated Resource Plan (IRP), inclusive of a least-cost scenario in the IRP,” he said.
“We anticipate a substantive engagement on the content, with a view to securing high-level consensus with our social partners at Nedlac on these critical documents for the energy sector.”
Lobbying for some time
He said business has been lobbying for some time for the release of the IEP and IRP.
“It is of particular importance that, given the fundamental importance of energy in the economy, they are tabled ahead of the Jobs Summit and the Investment Summit to be held in the next months,” said Kingston.
“Business would like to register its concern that substantive engagement with social partners on energy policy has been neglected despite previous commitments by government to formally engage with the Nedlac social partners.”
He said business views the IEP and IRP as critical planning tools that will enable decision makers in the private and public sectors to make fundamental energy related decisions.
“The energy sector plays a central role in ensuring viable and sustainable inclusive economic growth,” said Kingston.
“Business does, however, recognise that they cannot alone address the challenges facing the sector but must be implemented alongside other aligned and consistent policies.”
Among the challenges that are not expected to be addressed in these plans, and which business believes also need urgent attention include the structure of the electricity sector and, particularly, the role of Eskom. Furthermore, municipal indebtedness to Eskom is proving a significant threat to the viability of a wide range of industries.