Finance Minister Enoch Godongwana has reversed government’s decision to grant Eskom an exemption from disclosing its irregular expenditure.
This following an outcry from the public and after the minister was summoned to by five committees in parliament.
The government gazette of March 31 initially granted Eskom a three-year exemption from disclosing any irregular, fruitless or wasteful expenditure in its annual reports, starting from the financial year that ended in March.
During a parliamentary meeting on Wednesday, Godongwana explained that the decision was made after intense discussions with the auditor-general, Tsakani Maluleke, who advised that she should have input on how such gazettes are framed.
“We had to ask ourselves the question: If Eskom’s financial statements are being constrained by these irregularities, what are the implications for Eskom’s cost of capital?
“If they cannot raise that capital, what are the implications for the fiscus? So we look at it from a fiscal sustainability eye.”
Reacting to the public outcry over the exemption, Godongwana clarified that it was not intended to conceal corruption, but rather to protect the fiscus by allowing Eskom to have better financial statements.
“We appreciate that South Africans are quite aggressive and vigilant against corruption … We take that as a positive step,” he said.
“We also take it as a positive step because part of the challenge we are facing with the greylisting is the effectiveness — our ability to deal with corruption.
“The intention is to allow Eskom to have better financial statements.”
On Monday, the African Radical Transformation Alliance (ARETA) described the Treasury’s decision to exempt Eskom from disclosing its financial affairs as a sad day for democracy.
The civil movement, established by former ANC leaders including Carl Niehaus, the staunch ally of former president Jacob Zuma, was one of the parties that expressed opposition to Eskom’s exemption.
ARETA’s secretary Nkosentsha Shezi said: “ARETA notes that spending in state-owned enterprises is vulnerable not only to waste and misuse, but also to fraud and corruption.
“Lack of transparency is inimical to good governance.
“ARETA believes sunlight is the best policy for preventing corruption and maintaining high standards of integrity in the use of public funds.
“[Finance Minister Enoch] Godongwana’s decision comes in the wake of shocking revelations by former Eskom CEO Andre de Ruyter.”
According to De Ruyter, the entrenched corruption at Eskom was orchestrated and perpetrated by high-ranking ANC officials.
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