A comparative analysis of State-Owned Entities' responses to the energy crisis in South Africa and Nigeria

Abstract

Energy supply is integral to African countries’ socioeconomic development and emancipation as they strive to catch up with the developed world. However, energy poverty and the lack of meaningful responses towards the energy crisis seem challenging. The energy crisis, as the focus of this study, refers to the insufficient production and supply of electricity by state-owned enterprises (SOEs). Therefore, the energy crisis disrupts economic activities, households, and industries. The cumulative impacts of the energy crisis include disrupted essential services, economic growth, and lack of technological development. Countries like South Africa and Nigeria suffer from low economic growth due to the energy crisis, among other reasons. South Africa and Nigeria are the leading economies on the African continent and should lead the energy generation frontier, even to the extent of competing with other global actors and supporting the development of other African countries. Nevertheless, due to corruption, lack of maintenance and political interference, among others, they are unable to do so. This study uses agency theory (principal-agent interests) to argue that policy inconsistencies and a lack of political vision have hindered and led to shirking by SOEs regarding their primary mandate to ensure the security of supply. The significance of this study lies in the fact that, despite vast literature about the energy crisis in Africa, there is little attention given to the response measures by SOEs in South Africa and Nigeria in solving the issue. Hence, this qualitative study sought to gain an in-depth understanding of South African and Nigerian SOEs’ responses to the energy crisis. A case study design was employed using Eskom in South Africa and NESCO in Nigeria to understand these entities’ responses to the energy crisis in their respective countries. Accredited journal articles, reports, and books were analysed to understand the phenomena under study. The study's findings suggest that there have been responsive measures by SOEs in both countries, especially with Nigeria having undergone privatisation. However, factors such as political interference, corruption, maladministration, and lack of maintenance inhibit the energy supply. Therefore, the study concludes that SOEs require strategic measures to curb the energy crisis and tackle the abovementioned factors that lead to this issue.