Business Leadership South Africa (BLSA) CEO Busi Mavuso has, in her latest newsletter, congratulated State-owned Eskom on a full year without loadshedding, describing this achievement as a “remarkable turnaround” from only three years ago when South Africa experienced 300 days of loadshedding, which negatively impacted on the economy.

“While there are many contributors to this achievement, I want to congratulate, in particular, CEO Dan Marokane and his leadership team at Eskom. Through his leadership, the utility has implemented its Generation Recovery Plan, which has successfully improved plant performance,” she says.

“The energy availability factor is up and unplanned maintenance is down. We are seeing the benefit of the aggressive pre-emptive maintenance done over the last three years.”

Mavuso also recognises Energy and Electricity Minister Kgosientsho Ramokgopa’s efforts, noting his role in fostering a conducive policy environment.

Mavuso points out that Eskom's recovery has come at the same time as important reforms to the electricity sector overall, on the country’s path to a fundamentally transformed electricity market.

While there are still critical reforms needed to realise that vision, she says South Africa is “far down the path”.

Moreover, she notes that the end of loadshedding was also facilitated by the growth in private sector energy generation.

The National Energy Regulator of South Africa (Nersa) has now registered over 2 300 private sector generating facilities which collectively have over 18 GW of capacity, representing over R360-billion in investment.

Rooftop solar installations have surged and now account for an estimated 10% of total electricity production.

Mavuso says investment will continue, including into expanding the grid. However, key reforms, including the establishment of an independent transmission system operator (TSO), are critical and urgently need to be delivered.

She notes that the April deadline for the independent TSO’s introduction was missed, adding that there still is no firm timetable for finalising this reform.

Mavuso describes the independent TSO as essential for a competitive electricity market, noting that it will manage grid access neutrally, ensuring private generators can connect and compete fairly.

“Without it, Eskom controls both generation and transmission – the equivalent of letting one airline also control the airports. These reforms are complex and negotiations have been taking place with lenders regarding the separation.”

Mavuso says President Cyril Ramaphosa gave a clear signal in his February State of the Nation address that the full unbundling of Eskom would go ahead and that a dedicated team would iron out the details.

“We need to see the results of those efforts. That is the only way we will turn the current positive outlook by Moody’s into an upgrade. Every month without the TSO is another month where the promise of competition remains just that – a promise,” she says.

Mavuso argues that Ramokgopa must provide a clear timeline and ensure institutional resistance does not derail this critical reform.

“We cannot have structural reform drift or backpedalling.”

Ultimately, Mavuso says, South Africans will be able to choose from multiple electricity providers, adding that the benefits of competition will bring downward pressure on prices.

She notes that the Minister has a critical role to play in staying on course toward that vision.

“If we do not, then Eskom's achievement will fade as demand again outstrips supply and costs continue to balloon,” she warns.

Mavuso says the improvement at Eskom will contribute to its financial health, explaining that plant performance has meant a R9-billion saving from not using diesel in the open gas cycle turbines.

Revenue will improve too as Eskom has more electricity to sell, she says, adding that a major unresolved challenge for Eskom is the huge amount owed to it by local government.

Mavuso points out that Johannesburg was in the headlines last week after Eskom threatened to cut off the metro over the R5.2-billion it owes the utility.

She notes that it is among the biggest defaulters, but the total debt owed by municipalities to Eskom exceeds R130-billion.

Mavuso posits that this is the biggest financial risk facing the utility and the biggest barrier to Eskom's full financial recovery.

Mavuso describes Johannesburg’s debt to the utility as a symptom of the wider crisis facing the metro.

“Yet it was deeply disappointing last week to hear Mayor Dada Morero in his state of the city address proclaim Johannesburg was a city on the rise.

“This is out of touch with the reality facing citizens who must cope with regular water interruptions, electricity failures, robots and streetlights that don't work and a financial crisis that the National Treasury has sounded alarm bells about,” says Mavuso.

“The mismanagement of South Africa's economic heartland is a considerable constraint on the economy of the whole country. Yet the mayor could not level with the people that city management is failing or be honest about the root causes,” she adds.

Mavuso expresses that business needs the city to work.

“It remains the home for many of our biggest companies, and it needs to become the world class city it aspires to be, where businesses can grow into global champions.”

She said this cannot happen when businesses must install backup water systems and generators, maintain private security and navigate deteriorating roads – costs that magnify the burden of doing business and undermine competitiveness.

Mavuso says BLSA is supporting municipal reforms through Phase 2 of Operation Vulindlela to ensure the challenges facing local government receive much-needed attention.

“But ultimately, Johannesburg's turnaround requires political leadership willing to acknowledge the crisis honestly and act decisively. The mayor's denial won't fix broken infrastructure or restore financial health. South Africa cannot afford for its economic heartland to continue failing.”