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SA won’t consider quantitative easing to help Eskom – Masondo

‘Countries that have used quantitative easing had zero percent interest rates and that is not the situation here.’

South Africa’s government won’t consider using quantitative easing to help rescue troubled state power utility Eskom, deputy finance minister David Masondo said.

“I don’t believe that something like quantitative easing will be able to help Eskom as the situation between South Africa and other countries is totally different,” Masondo told lawmakers in Cape Town on Wednesday. “Countries that have used quantitative easing had zero percent interest rates and that is not the situation here.”

Eskom is saddled with more than R440 billion of debt and isn’t generating enough income to cover its operating costs and interest payments. The government is currently finalising details of a R230-billion bailout plan to help the utility remain solvent.

The option of resorting to quantitative easing was first raised by Ace Magashule, the secretary-general of the ruling party.

Read: Top ANC officials clash over Sarb mandate

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Still don’t really get it do they. Even if you are able to pay the debt (which they cant) it does not mean the entity is rescued.

Should rescue not include getting the entity in a situation where it can operate as a going concern and turn a profit or at least break even?

If you pay the debt now (which they cant) and all the incompetent corrupt cadres remain in place how has ESKOM been rescued. Will they now turn a profit going forward?

Shame.

In past struggle for freedom times, same country, did easing all the time. Resulting in cheapest electricity in the world. supplied by healthy Eskom. It should have been done long time ago. Doing it now is useless and will have no effect. Compare it with raising a Titanic, pointless, for the obvious.

Seems the local hegemony have learnt a new word for ‘stealing’, because that is what ‘Quantitative Easing’ is. Printing currency not even backed by debt, is theft. At least try and understand what your masters, whom are suggesting this, are trying to teach you.

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