Wage talks aggravate South Africa’s Eskom reform woes

Significance

The contest over wages is a proxy for unions’ broader resistance to the turnaround plan to address Eskom’s parlous financial and operational situation. The outcome will affect this broader battle.

Impacts

• Any above-inflation wage increase will have a knock-on effect on Eskom’s debt.
• The talks’ outcome may influence other standoffs between government and unions representing public servants and state-owned enterprises.
• Recently improved macroeconomic performance, driven by rising commodity prices, will likely reinforce union demands across all these talks.