Concerns as Eskom granted exemption from declaring irregular expenditure

3rd April 2023 By: Lumkile Nkomfe - Creamer Media Reporter

Concerns as Eskom granted exemption from declaring irregular expenditure

Following a special government gazette, issued on Friday, exempting Eskom from declaring its ‘irregular, fruitless and wasteful’ expenditure, opposition parties have expressed their distress over the move, as they believe this will enable the power utility to hide its underlying malfeasance.

The exemption is understood to have been at the request of Eskom board chairperson Mpho Makwana and he is yet to canvass the necessity of this exemption. ActionSA is in direct opposition with National Treasury’s decision asserting that this “is a clear abuse of power.” 

According to National Treasury, Eskom would still be required to disclose all information required by the International Financial Reporting Standards (IFRS) and general debt listing requirements. Further, Minister of Finance Enoch Godongwana has set conditions in place including the canvassing of Eskom annual reports and financial statements detailing irregular expenditure. 

“Minister Godongwana’s assertions that the exemption was based on technical accounting grounds, when viewed within the context of the State of Disaster and [Electricity] Minister [Kgosientsho] Ramokgopa’s views that crime and corruption is not a significant issue at Eskom, paints a clear picture of an ANC [African National Congress] abusing State mechanisms to hide the true impact of corruption and crime on our energy crisis. With this newest move, the ANC-aligned criminal syndicates will be given full license to continue looting at the utility,” argues ActionSA president Herman Mashaba.

Democratic Alliance (DA) MP Dr Dion George has called on National Treasury and Godongwana to withdraw the exemption. 

“It is unacceptable to hide material information from auditors in the hopes of obtaining a better audit outcome. Finance is based on trust and this exemption further erodes confidence in our already battered economy,” he said.

The DA has noted the “closing balance of irregular expenditure amounting to R67.1-billion on March 31, 2022 in Eskom’s latest annual report”. The party is concerned that the lack of transparency attributed to the exemption will exacerbate the issue.

Further discontent was expressed by nonprofit organisation Greenpeace Africa communications officer Chris Vlavianos, who asserted that this decision gave Eskom free rein to avoid transparency. He added that the announcement had raised more questions than answers.