Serious problem with the ANC’s economic turnaround plan

On October 6, President Cyril Ramaphosa unveiled a 10-point plan to revive economic growth, create jobs and strengthen state capacity, an attempt to curb what he called an “economic emergency.”

The first of the 10 points in the plan is to “use electricity tariffs and transmission investment to drive economic activity.”

This includes implementing preferential electricity rates for ferrochrome, manganese and steel sectors, as well as fast-tracking the Transmission Development Plan and rolling out 14,500 km of transmission lines. 

Opposition parties and some analysts argue that the ANC, having been in power for over three decades, is largely responsible for the current economic challenges, including the energy crisis and infrastructure decay.

They contend that the same leadership that contributed to the problems cannot be expected to resolve them effectively.

While the focus on the energy and electricity sector has been praised by many, including the ANC’s biggest Government of National Unity (GNU) partner, the DA, economists have argued that the problem will lie in the implementation. 

“These are good ideas. The question is not whether the plan is wise, but whether the state can implement it with discipline and integrity,” said Professor Joseph Sekhampu, Chief Director at the North-West University Business School.

The ANC said it expects to see results from the plan by 2027; however, the government has already delayed both aspects of its plan to improve access to electricity, the first of its ten points.

Major mining and manufacturing players, including Glencore, Anglo American Platinum (Amplats), Sibanye-Stillwater and ArcelorMittal, have announced significant job cuts this year, citing high electricity costs as one of their biggest challenges. 

The latest to announce potential job cuts is Samancor, which has warned employees that in the absence of preferential tariffs, it will have no choice but to take “drastic action.”

High electricity costs leading to de-industrialisation

The company’s notice read: “Despite ongoing engagements and representations to the government, we have not received the concrete relief on electricity pricing that we hoped for.”

“And our operations desperately need it to remain competitive.” The plan to introduce preferential tariffs for these sectors was first announced in June 2025.

This was after Glencore and Samancor flagged that they would have to shut down if no changes were made. 

However, these companies and others in the affected sector have still not seen any concrete progress on the agreement. If introduced, this may cause ordinary South Africans to pay more for electricity.

During a subcommittee meeting of the National Energy Regulator of South Africa (NERSA) on the issue, members of the regulator discussed that, if approved, the lower tariffs would reduce Eskom’s industrial sales volumes. 

This will place more pressure on customers to absorb the fixed costs through higher electricity tariffs. 

Under current agreements, Semancor and Glencore are required to consume 80 GWh per smelter, or maintain a load factor of 70%; if they drop their consumption, they are required to pay higher tariffs. 

“They can no longer afford to meet that consumption and can’t afford to pay for the consumption they don’t use,” said Charles Geldard, regulatory Specialist at NERSA.

Energy and Electricity Expert Vally Padayachee told Newsday that customers are already not paying Eskom or local municipalities enough to cover their costs. 

This is despite electricity tariffs having increased by 900% since 2008. 

“Lower tariffs have been set in place to protect consumers but, without cost recovery mechanisms, it has hurt the ability of these entities to fund necessary infrastructure and service delivery,” Padayachee said. 

Failure to launch

Other experts have argued that stopping the deindustrialisation of the country is worth the sacrifice. 

“South Africa has 80% of the world’s manganese, as well as chrome, coal and iron. We have all the ingredients and, more importantly, we have the proven ability to make steel,” said Logistics Professor Jan Havenga.

“A steel industry is one of the shining examples of how successful a country can be. To shut it down is to shut down a part of our capability as a nation.”

The ANC did not provide any clarification on how it would work around these issues. No date has been given for the implementation of preferential tariffs, despite government commitments.

The second side of the coin is the turnaround plan’s dependence on speeding up the Transmission Development Plan. 

The plan, a public-private partnership which requires R440 billion in investment funding, was originally scheduled to complete building 14,500 km of transmission infrastructure by 2034. 

However, before the initial procurement stage has even begun, the project has already been delayed by 6 months. 

The pre-qualification process, to identify capable, sound bidders, was to be completed by July 2025. It remains incomplete. 

The Ministry of Electricity said it has “revised the project timeline” and adjusted this deadline to mid-December 2025. 

The release of final requests for proposals, scheduled for November 2025, has now been delayed by a year, expected to be released in quarter 3 of 2026. 

Sekhampu said that the structural failure of the state has historically been in moving beyond theatrical planning and into execution. 

“Reform will only matter when professionalisation becomes practice and competence outweighs allegiance.”