Budget 2023: Rebuild Eskom and state capacity

The Institute for Economic Justice (IEJ) issued a statement on February 21, 2023, arguing that South Africa's national budgets and monetary policies have systematically undermined the government's developmental goals. The IEJ calls for a shift away from debt stabilisation and austerity toward a development-focused budget that prioritises public investment in infrastructure, the care economy, and the green economy, while specifically addressing the crisis at Eskom and the inadequacy of social protection grants.

• The IEJ argues that National Treasury's focus on debt stabilisation and a primary budget surplus has led to a regressive macroeconomic framework that cuts spending on social priorities and public services while providing tax rebates to the wealthy.
• The document calls for a fundamental shift in monetary policy, suggesting the South African Reserve Bank (SARB) should move beyond nominal inflation targeting to prioritise real GDP growth, employment, and a competitive exchange rate.
• To resolve the crisis at Eskom, the IEJ proposes that the state absorb Eskom's debt, utilize quasi-state creditors like the GEPF for debt write-offs or interest holidays, and use international climate finance to resolve debt without privatising the utility.
• The IEJ identifies three primary drivers of Eskom's energy costs that must be addressed: diesel, coal, and independent power producers (IPP). Specifically, it suggests renegotiating power purchase agreements for IPP bid windows 1 to 4, which represent one third of primary energy costs, and procuring diesel directly from wholesalers to save over R1 billion.
• The statement criticises the Just Energy Transition - Investment Plan (JET-IP) for insufficient funding for skills development (0.1%) and economic diversification and innovation (0.3%), calling for a reorientation toward job creation and the establishment of a social security fund for transitioning workers.
• The IEJ demands that the Social Relief of Distress (SRD) grant be raised to at least the Food Poverty Line of R633, noting that approval numbers dropped from 10.9 million in March 2022 to 7.4 million in January 2023 due to budget caps.
• The document highlights a disconnect between presidential promises and budget allocations, noting that public sector Gross Capital Fixed Formation (GFCF) averaged only 5.8% of GDP between 2010 and 2020, and that fixed capital investment remains R84.6 billion below pre-pandemic levels.
• The IEJ reports significant vacancies in public services, including 39,000 posts in the public healthcare system and 73,000 posts in the public basic education system.

APA

Institute for Economic Justice (2023). Budget 2023: Rebuild Eskom and state capacity. https://iej.org.za/wp-content/uploads/2023/02/IEJ-STATEMENT_Budget-2023-Rebuild-Eskom-and-state-capacity.pdf

Chicago

Institute for Economic Justice. Budget 2023: Rebuild Eskom and state capacity. 2023. https://iej.org.za/wp-content/uploads/2023/02/IEJ-STATEMENT_Budget-2023-Rebuild-Eskom-and-state-capacity.pdf.

Wikipedia

{{cite press release |author=Institute for Economic Justice |title=Budget 2023: Rebuild Eskom and state capacity |date=21 February 2023 |url=https://iej.org.za/wp-content/uploads/2023/02/IEJ-STATEMENT_Budget-2023-Rebuild-Eskom-and-state-capacity.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{instituteforeconomicjustice2023budget, author = {{Institute for Economic Justice}}, title = {{Budget 2023: Rebuild Eskom and state capacity}}, publisher = {Institute for Economic Justice}, year = {2023}, month = feb, url = {https://iej.org.za/wp-content/uploads/2023/02/IEJ-STATEMENT_Budget-2023-Rebuild-Eskom-and-state-capacity.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }