That government has a hand in making sure that infrastructure is built seems sensible enough. They are, after all, the people who control the planning system that allows infrastructure to be built. But that government must build it? Why?
Consider, for a moment. Whether a motorway, where it goes if there is to be one, OK, why not government? But there’s nothing which says that it should be government workers wielding the spades. Or, say, government has a role in regulating the spectrum over which mobile internet signals travel. But we don’t say that government should then be sticking up the masts which allow this to happen. Actually, we say entirely the opposite, that we should insist upon there being private sector competitors doing this.
Actually, one of the things we learnt from the first generation of mobile phones was that take up was higher and swifter in places with competing private sector suppliers than it was with state backed monopolists. Significantly so and importantly too, given the boost that a mobile network gives to economic growth in a non-landline network place.
So, why this?[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Amazon’s tax bill has stayed low over two decades as the company funded its expansion. One project that will be written off against tax is a fibreoptic cable stretching from the US to Africa: Bezos and Facebook’s Mark Zuckerberg are engaged in a race to beat Google to wire up a continent that the United Nations says will see the largest population growth on the planet over the next 30 years.[/perfectpullquote] [perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]That might seem altruistic, but the cabling of an entire continent would be much better funded by African taxpayers, with the help of western taxpayers, and without strings attached. Unfortunately, as long as the tech giants manoeuvre to limit their tax liabilities there is not enough cash for public investment.[/perfectpullquote]
Countries which haven’t even managed the rather simpler technology of wiring up a copper cable between the airport and the PM’s house should be doing undersea cabling? These people should be put in charge of it:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Eskom was forced to suspend its Chief Financial Officer Anoj Singh in July 2017 when the Development Bank of South Africa threatened to recall a R15 billion loan if no action was taken against Eskom officials (including Singh) who were involved in corruption allegations involving to the Gupta family. In September 2017 Minister for Public Enterprises, Lynne Brown, instructed Eskom to take legal action against firms and individuals involved; ranging from Gupta family owned consultancy firm Trillian Capital Partners Ltd. and consultancy firm McKinsey to Anoj Singh and acting Chief Executive Matshela Koko.[/perfectpullquote] [perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]A report compiled by Eskom and G9 Forensic found that the two consulting firms including Gupta owned Trillian made R1.6 billion (US$120 million) in fees with an additional R7.8 billion to made from future contracts. An investigation done by the amaBhungane Centre for Investigative Journalism found that the Gupta family had received contracts worth R11.7 billion from Eskom to supply coal between 2014 and 2017. With pressure for Eskom to sign the first coal supply contracts with Gupta owned entities being applied on the state owned firm by then President Jacob Zuma.[/perfectpullquote] [perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Price increases
Eskom took out a number of loans to construct the additional capacity and significantly increased electrical tariffs by an average of 22% a year between 2007 and 2015 to in an attempt to offset costs. In 2019 Eskom controversially applied to the National Energy Regulator of South Africa (NERSA) to increase tariffs by an additional 45% over the proceeding three years arguing that it needs the increase in revenue to avoid a debt induced death spiral. Eskom was controversially granted a 13.8% increase by NERSA in March 2019. The South African civil society Organisation Undoing Tax Abuse (OUTA) stated that by 2019 Eskom’s electrical tariffs had increased by 500% over the previous 11 years. Pietermaritzburg Economic Justice and Dignity stated that the increased tariffs will exacerbate urban poverty negating increases to South Africa’s basic income grant[/perfectpullquote]
This is how we’re going to make Africa rich?
There is an amusement here. At least when Tiny Rowland owned the paper The Observer knew how Africa worked.