South African President Thabo Mbeki on Friday dismissed fears of a collapse in the continent's strongest economy while apologising for a power crisis that threatens to clip growth rates. Delivering his annual state of the nation address, the embattled president conceded there was deep unease about the country's future but said the foundations of the economy remained sound.
"We are indeed in a period of challenges, but surmountable challenges," he told lawmakers to mark the official opening of parliament in Cape Town. "Like the rest of our government, I am convinced that the fundamentals that have informed our country's forward march in the last 14 years remain in place."
Though he was toppled by arch rival Jacob Zuma in December as president of the ruling African National Congress, Mbeki had been able to point to a record of uninterrupted economic growth during his nine-year tenure as head of state.
But his reputation for competence has also taken a battering since the start of the year with large parts of the country plunged intermittently into darkness as a result of power shortages that had long been forecast.
The commercial capital Johannesburg has been hardest hit, and analysts have warned of foreign investors taking flight as everything from factory production to traffic lights have been affected.
Gold and platinum production was recently halted when power to the mines could not be guaranteed, as economic losses from stalled manufacturing and retail are estimated to be running into billions of rands. Mbeki said the electricity emergency had been caused by a "significant rise" in demand outstripping new capacity over the last two years.
"It is ... necessary that we take this opportunity to convey to the country the apologies of both the government and (power utility) Eskom for the national emergency," he said.
But he stressed the turbulence was manageable and said the country would confound sceptics by successfully hosting the 2010 football World Cup. "I have absolutely no doubt that we will honour our undertaking to FIFA and the world community of soccer players and lovers to create all the necessary conditions for the holding of the best ever FIFA soccer World Cup tournament." Rather than a cause for despair, the current reality should be seen as an opportunity for the nation to become more energy efficient, argued Mbeki.
"We face an emergency, but we can overcome the problems in a relatively short period," he said. "This situation has precipitated the inevitable realisation that the era of very cheap and abundant electricity has come to an end." The government would focus on reducing consumer demand while investing in new generation capacity for the longer term.
Mbeki received a standing ovation from lawmakers, even as recent economic jitters have helped drag his approval ratings to the lowest in years. Zuma called it a "well-balanced" speech and endorsed Mbeki's approach to the electricity crisis. "The president has put across things that we are all supporting," Zuma told public television.
But the main opposition Democratic Alliance, which has called for heads to roll over the power crisis, said Mbeki had failed to take leadership and would be filing a motion for early elections before parliament next week.
"In a democracy the people who caused the problems are held accountable," said Democratic Alliance leader Helen Zille. "This was the speech of a manager who assumes he has a good management team, which the president doesn't have." Patricia de Lille, leader of the Independent Democrats, said Mbeki "failed to address issues that confront us such as the electricity crisis".
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