Identifying weaknesses Bureaucratic impediments Bureaucracy and overregulation are considered as structural impediments that make it difficult for South Africa to achieve meaningful economic growth. Officials are sometimes fixated on compliance requirements, instead of seeing the ‘bigger picture’. More rules and regulations are therefore not seen as the answer to subvert fraud and corruption, instead inhibiting delivery. Concern about the level of compliance necessary in undertaking the procurement involved in systemic power system maintenance has recently been expressed by top management of Eskom.
Central planning shortcomings The energy sector lacks a centralised, coordinated approach to synergies in the value chain. For example, a lack of coordination in the energy value chain, made worse by security weaknesses, led to a situation where the Richards Bay Coal Terminal’s export volumes in 2021 dropped to the lowest level since 1996. That, at a time when global coal prices were at record levels, resulting in a missed opportunity for the country.
Education, training and skills development The quality of South Africa’s education and training system has been highlighted as an area of concern. The basic education system is considered flawed, with poorly performing teachers, poor work ethic, a lack of community and parental support, and poor control by education authorities, all exacerbated by low levels of accountability. The result is learners that lack discipline, high levels of absenteeism and poor performance in essential areas of mathematics and literacy (Mouton et al, 2012). As the basic education system informs the tertiary sector, its shortcomings are widely felt. While there is an opportunity to draw South Africa’s unemployed youth into the energy sector, there is a risk that the country may not be able to fully transition into a new technological model and sophisticated value chains, if it does not have the requisite domestic capabilities. There is a view that South Africa is not imparting its youth with the correct skills for the transitioning energy sector.
Energy pricing and regulation The entire regulatory regime needs to be rethought to consider the purpose it serves, the value that it adds and the capabilities it unleashes. The point was made that the National Energy Regulator of South Africa (Nersa), which sets and approves tariffs, must review its
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