situation report

Jan 29, 2019 | 16:47 GMT

1 min read

South Africa: Government to Debate Breaking up Electricity Monopoly

What Happened: The South African government will debate whether to break up Eskom, the country's main electricity corporation, into three companies to improve its viability, according to Public Enterprises Minister Pravin Gordhan, Reuters reported Jan. 29.

Why It Matters: Eskom, which holds a de facto monopoly over South Africa's electricity sector, has experienced various power generation problems and endemic corruption. If the company cannot improve its performance, it will pose significant risks to South Africa's economy and limit Pretoria's ability to project economic power into the broader southern African region.

Background: Growing corruption and mismanagement in recent years have hampered South Africa's economy and prevented Pretoria from exerting influence over the rest of the continent. The government of President Cyril Ramaphosa is undertaking measures to rectify the problems.

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