LUNGILE MASHELE: Beware Brics partners bearing gifts

“Do not trust the horse, Trojans. Whatever it is, I fear the Greeks even when they bring gifts.” — Virgil 

Brics is in town, and SA has brought out its fine China. But the streets of Sandton, with their luminous skyscrapers, offer no indication of the country’s vast inequality. The homeless pointsmen who once manned dysfunctional traffic lights on Grayston Road are temporarily unemployed. All is well, and the “very important lights” are on in the republic.

President Xi Jinping of China arrived with a huge business contingent intent on doing deals in SA. On Tuesday President Cyril Ramaphosa announced a donation of R170m in emergency power equipment, alongside a R500m development assistance grant from China to alleviate SA’s energy crisis.

This agreement comes on the back of various agreements signed with the Netherlands, Denmark and the US leading up to the Brics summit. These all centred on the energy sector, with the US offering a technical assistance grant of R24m for transmission grid expansion in SA.

The funds are valued and have the potential to go a long way towards addressing SA’s energy challenges, but we cannot afford to be naive and enter into these agreements with outstretched hands and cap in hand. 

I reflect on the words of Virgil as more “highly confidential” energy agreements are entered into without a well-articulated implementation plan — and with salivating mouths in both the public and private sectors. 

SA should articulate its requirement for intellectual and technical collaborations at the business, government and tertiary education levels with its technical development partners. These nations boast some of the most prominent thinkers and advanced technical universities globally, particularly in the realm of energy technology and planning.

The potential for research & development (R&D) partnerships with SA universities and Eskom is immense. Such collaboration holds huge promise for shaping the future of energy technologies as they progress. 

Considering that China produces eight out of every 10 solar PV panels globally, and SA’s vast solar resource, it is worth exploring manufacturing and development agreements that mutually benefit both countries. As SA’s energy and unemployment woes are highlighted, a key aspect of this effort would involve fostering international co-operation with equipment manufacturers to prioritise the supply of components and equipment to SA. 

China’s status as home to some of the world’s largest engineering, procurement and construction firms, renowned for their ability to execute mega power projects efficiently and within budget, presents a valuable opportunity for SA. By tapping into this international engineering, procurement and construction expertise support can be offered to local companies that are struggling to meet the demands and scale required by the energy industry. 

A pertinent question is how these funds will be allocated to reduce load-shedding and get new capacity onto the grid quicker. We need to understand the details of these agreements and whether South Africans are the true beneficiaries, or whether we are recycling money on behalf of these nations. Will the goal be to reduce unemployment, grow industries and local original equipment manufacturers, fast-track transmission projects and capacitate engineering, procurement and construction firms? 

Most technical and development agreements entail explicit caveats that, while the grant is given to the donor recipient, all the consulting, engineering and construction work is farmed back to the donor country through its consultants and trade association members. Equipment must also be bought from donor country manufacturers.

For instance, the R24m grant provided by the US buys it a R210bn lottery ticket for Eskom’s transmission expansion. Similarly, the R500m provided by China will allow it to participate in the estimated R1.5-trillion energy transition bonanza.

The Brics nations have landed on our shores bearing gifts, and will leave shiny mirrors that offer our leaders no self-reflection. The West and Brics are clear on their intentions for us, but do we know how to leverage our partnerships with these nations for our economic prosperity?

It seems that our government is always eager to accept aid to avoid doing the hard work of growing the economy. 

• Mashele is an independent energy economist.