JOHANNESBURG, 10 AUGUST 2020 – The Steel and Engineering Federation of Southern Africa (SEIFSA) is deeply concerned about a decision by Eskom in the Eastern Cape to import components designated by the Department of Trade, Industry and Competition and the National Treasury for local purchase.
SEIFSA understands that Eskom has stated that the concession, which is valid from August to November 2020, is necessitated by the restrictions placed on local manufacturing and supply industries owing to the impact the COVID-19 pandemic and the associated lockdown.
SEIFSA Chief Executive Officer Kaizer Nyatsumba said Eskom’s decision is terrible for local businesses and job creation.
“The argument put forward by the utility is irrational, especially given the need for businesses, civil society, labour and government to rally behind efforts to lift the country from the current recession, which has been worsened by the COVID-19 pandemic. As a national federation of employer associations, we are deeply concerned that the latest move by Eskom is going to undo all the progress made thus far towards enhanced localisation and job creation,” Mr Nyatsumba said.
He said Eskom’s stated reason does not make sense because local manufacturers resumed some level of manufacturing activity during lockdown alert level 4 in May. He said it was clear that the electricity utility had failed to engage with manufacturers to ascertain their capacity to meet demand.
Mr Nyatsumba said Eskom’s decision to import components while there is local productive capacity is both unfortunate and misguided. He called on the company to reconsider its decision and on the Ministries of Public Enterprises, Finance as well as Trade, Industry and Competition to prevail upon the power utility to support local businesses and preserve jobs.
Mr Nyatsumba said SEIFSA has previously made several submissions to policy makers to help arrest the extent to which total domestic demand is satisfied by imports. He said it was important that designation was rigorously enforced by relevant Government agencies.
He said it was especially important, during the current economic situation facing the country, that key State-owned enterprises like Eskom play an integral role in boosting demand for intermediate manufactured products, given the extended implications in sustaining businesses and maintaining jobs.