On March 15, South African President Cyril Ramaphosa declared a state of national disaster, followed by a lockdown from March 26 lasting for at least 21 days. The latest figures are striking fear in the hearts of government leaders: there are now over 100 new people infected every day, with a total of about 1,500 cases and five deaths as of April 4. In order to limit the exponential growth, a strong focus is being placed on testing, with 47,000 tests already carried out and the plan to perform 30,000 daily. For this purpose, 67 mobile units are now active throughout the country, which has some of the highest levels of immune system depression on the continent, with as many as 7.1 million South Africans who are HIV-positive.
The lockdown was accompanied by draconian measures—including a ban on the sale of alcohol and cigarettes—and by wide-ranging militarization, particularly in the townships, where social distancing seems more difficult to achieve than anywhere else. It’s no coincidence that Ramaphosa has also deployed the army and private contractors to “assist” the forces of law and order, and ever since the first day of total lockdown, there have been countless episodes of violence and abuse against the population, with the all-too-frequent use of rubber bullets and water cannons. A thousand homeless persons were “rounded up” with hardly any formalities and locked up inside the old stadium of the capital, Pretoria—where there are now 10 people sharing each tent, which should not accommodate more than 2-3 people to comply with the anti-contagion regulations.
In a country where unemployment is at 29% and, out of a population of 58.8 million people, about 7 million are suffering from hunger because they’re in conditions of extreme poverty and 20% of citizens have problems getting their basic needs met, the social tensions are running very high, and will only increase if the spread of COVID-19 and its impact on the economic life of the nation cannot be limited.
Even before the borders were closed to citizens coming from “high-risk countries” (including, of course, Italy), there have been episodes of intolerance towards Europeans and Asians, singled out as potential spreaders of the disease. But for the long term, everyone’s fears are focused, more than anything, on the already-strained financial coffers of the state. Official statistics show that the contraction of the economy in the fourth quarter of 2019 was 1.4%, compared to forecasts by analysts who expected a likely decline of 0.2%. It was an economic collapse that was predictable and whose seed had been planted long before.
During the nine years of the presidency of Ramaphosa’s predecessor, Jacob Zuma, the inappropriate ties between Zuma himself and the Gupta family, originally from the Indian state of Uttar Pradesh, mired the largest African economy in a sea of corruption. In 2016, the bubble burst, the end result of illegality on such a scale as to be called “State Capture.” That means, simply put, plundering the coffers of an entire country with impunity and with no compunctions, and getting away with it.
The Guptas have infiltrated all the nerve centers of the state, getting their hands on contracts for their companies and influencing the activity of large public enterprises such as Transnet and Eskom. The latter, Africa’s most important energy multi-utility and for many years the flagship of the Pretoria government, was already on the brink of bankruptcy before the coronavirus came into play, with 27 billion euros in debt. Now, the state might no longer have the economic resources to rescue from bankruptcy a company that employs over 40,000 people, but which for almost two decades has been marred by “inadequate” management, to say the least.
Eskom’s accounts have been drained by “errors” tied to the construction of the enormous coal-fired power plants of Kusile and Medupi, but also by another financial black hole, the mega-hydroelectric plant of Ingula, on the border between the Free State and KwaZulu-Natal, which we had the opportunity to visit in the second part of 2019. This is an “engineering prodigy” developed by the Italian companies Salini-Impregilo and CMC from Ravenna, consisting of two dams connected by underground tunnels over two kilometers long through which water passes, and which was supposed to generate 1.2 gigawatts of energy through the four mega-turbines located in a power plant 400 meters underground. Unfortunately, by Eskom’s own admission, the production capacity is currently unable to go beyond 25% of the estimated output.
At the moment, we know that in 2005, when the works began, the project was estimated to cost 8.9 billion rand (554 million euros), while in the meantime the costs have ballooned to over 36 billion rand (about 2.3 billion euros), with even more adjustment works to come, as mentioned by Eskom in its official annual report.
The explosion of the costs was already seen since the very first months of the project, as a former employee of the construction consortium whom we met in Johannesburg in the past months, Mike Hall, explained to us. “I’ve never seen such a thing: as soon as a problem arose, the builders would make a claim against Eskom, which paid up without a word, even when the blame lay with the consortium (i.e. with CMC and Salini – n.ed.)”. In November 2013, a very serious accident occurred in which 6 workers lost their lives. According to Hall, this was a tragedy that could have been avoided and that could be blamed on the consortium for their failure to take a number of safety measures. However, Salini-Impregilo and CMC again made claims for compensation payments from Eskom, whose debt had ballooned in the meantime. It is worth recall that CMC, investigated in Kenya for a case of international corruption, had started this South African project thanks to its good relations with the construction magnate Philani Mavundla, in turn a “great friend” of former President Zuma. Mavundla won the contract for Ingula, then shared it with the two Italian companies.
The alliance between CMC and Mavundla has had some hiccups with regard to another project worth hundreds of millions of euros, the one for the expansion of the largest African container terminal in the port city of Durban, which was shut down at the beginning of 2019 on charges of fraud in a tender process that involved CMI Emtateni, a joint venture consisting of CMC from Ravenna and a company called CMI Infrastructures, of which Mavundla is co-director. Similarly, in the case of the port of Durban, the client is also a public company, Transnet, which is also heavily indebted.
But in addition to exacerbating the economic crisis, the coronavirus drama risks further worsening the environmental crisis.
In a country whose energy mix is 77% dependent on coal, there is already talk of watering down the current emissions control standards as a favor to prop up the teetering Eskom. According to the Life After Coal Campaign, which has relentlessly fought the proposed lowering of standards, this would cause an additional “3,300 premature deaths” every year.