ANC mulls diverting UIF funds to save Eskom and is met with opposition.
The African National Congress (ANC) has proposed using state-run unemployment and compensation fund surpluses to help rescue Eskom, triggering opposition from labour unions.
In discussion documents, the ANC pointed to the Unemployment Insurance Fund (UIF) and the Compensation Fund combined surpluses of R225 billion in 2019, suggesting that instead of investing these funds in listed companies and government bonds, they should instead be used for “economic reconstruction”. Eskom’s debt stands at R484 billion.
The proposal ties in with earlier calls to use civil servants’ pension funds to reduce Eskom’s debt. It has encountered opposition from labour unions, key allies of the ANC who have criticised the government for mismanagement and corruption at the utility.
Cosatu’s position is that the focus of the UIF should be on availing every resource that it can to assist the millions of workers who have lost wages and jobs because of Covid-19. The union said UIF cannot afford to continue to carry the nation on its shoulders alone and that it is critical that workers determine where their funds are invested.
The 1.8 million-member union federation has called for more assistance from commercial banks to boost the stagnant economy and help Eskom rather than relying solely on workers’ contributions. The UIF has used some of its surplus to compensate workers who lost their jobs because of the impact of the Covid-19 outbreak.