Reserve Bank governor Lesetja Kganyago. Picture: FREDDY MAVUNDA
Reserve Bank governor Lesetja Kganyago. Picture: FREDDY MAVUNDA

The Reserve Bank has ruled out lending money to Eskom as it’s not allowed to by law and because it won’t make the embattled utility’s debt magically disappear anyway, governor Lesetja Kganyago has said.

“Let’s suppose some rogue governor was in place and decides to do it and buy Eskom debt, the debt doesn’t disappear,” Kganyago said on Friday at the Bank’s AGM in Pretoria.

“The only thing that has changed is that instead of Eskom owing some investor, it is owing the Reserve Bank. It must still pay that interest rate. You can’t make debt disappear à la magic, like ‘abracadabra’ and then the debt disappears. You can’t do an abracadabra with debt.”

The government announced this week it would give Eskom an additional R59bn bailout to stay afloat, almost two months after the ANC’s secretary-general Ace Magashule suggested that the state should print more money to eliminate “inter-governmental debts.”

Bloomberg