Ramaphosa rules out IMF assistance for Eskom

Deputy President Cyril Ramaphosa on Thursday emphatically ruled out International Monetary Fund (IMF) assistance for struggling State-owned power utility Eskom, saying it could cost the country in terms of sovereignty.

"Eskom is a jewel of our democracy and we need to pay attention to it and we will," Ramaphosa told the parliamentary press corps at a breakfast meeting where he was asked if he would countenance IMF intervention.

"For that reason, we should not go to the IMF because once we do we are on a downward path, we will be sacrificing our independence in terms of governing our country and sacrificing our sovereignty."

He noted that there was a real risk the conditions the IMF would impose in exchange for financial help for Eskom, could include cuts in social spending. The fund could for example order Eskom to do away with free electricity quotas for the poor and indigent, Ramaphosa added.

Eskom has borrowings of R360-billion, of which more than R200-billion is guaranteed by the government. It has emerged that the company's liquidity reserves are dwindling and last month, in his medium-term budget policy statement, Finance Minister Malusi Gigaba termed its financial position the single biggest threat to the stability of the economy.

Ramaphosa described Eskom's financial woes, amid mounting evidence of corruption at the company, as "almost the perfect storm" but said the government knew how to resolve these and that it needed to act fast.

"We are going to reposition Eskom in a short space of time and then it will be fixed," he said.

"I don't think it can get much worse. Now we know what to fix, we will put in place the right people and shore up the fortunes of Eskom."