The latest decision by the National Treasury to exempt Eskom’s top management from declaring future fruitless and wasteful expenditure has been met with contempt.
On Friday, March 31, Finance Minister Enoch Godongwana gazetted an amendment to Section 55 (2) (b) (i) of the Public Finance Management Act (PFMA) for 2022/23. The legation requires state entities to disclose details of their annual financial statements and annual reports that reflect any material losses through criminal conduct, as well as irregular expenditure and fruitless and wasteful expenditure that occurred during the financial year.
What this then means is that in the current financial year and for the next two years, Eskom will be exempt from submitting the financial statements of material loss.
The Treasury is yet to release a comprehensive statement explaining the rationale behind its decision. A news site was quoted as saying the Treasury “had issued the gazette in response to a letter from Eskom chairperson Mpho Makwana” and the “Treasury said it would issue a technical explanation soon to explain the rationale behind the measure”.
On Monday, Western Cape Premier Alan Winde slammed the move saying: “This exemption from Treasury, which is the guardian of our country and government’s financial guardrails, flies in the face of all financial checks and balances and good governance.
“The fact that it has been given the go-ahead by Finance Minister Enoch Godongwana makes it even more concerning and perplexing. It seems that rather than stopping corruption, it is being formalised at Eskom.”
Winde also questioned whether this was “an attempt to protect the Mafias which are holding the company hostage”.
“What are they trying to conceal? This is a major blow to transparency, which is critically needed in our country, especially at state-owned entities, many of whom are in a shocking state,” he said, adding, “this will be a major setback to meaningfully dealing with the energy crisis and fixing Eskom”.
The EFF has also rejected the decision, calling it “irrational, reckless and deplorable”.
“Eskom is encountered with extreme levels of corruption… we are appalled by the desperate and sickening attempt by the governing party to hide the rampant corruption at Eskom that has plunged our country into avoidable electricity blackouts.”
It said the Treasury was operating like “the Mafia, casting a dark shadow over over our democracy and the transparency it requires”.
The EFF said it planned to write to the chairpersons of the standing committees on public accounts and finance and the portfolio committee on public enterprises, to seek permission from National Assembly Speaker Nosiviwe Mapisa-Nqakula to convene an urgent joint meeting, so that they could receive a detailed report explaining the rationale behind the decision.
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