Rent-seeking dynamics in South Africa’s Minerals Energy Complex: the political economy of procurement at Eskom

This thesis examines the rent-seeking and rent allocation processes in South Africa’s minerals energy complex (MEC) using Eskom, the country’s national electricity company, as a case study. Recurrent periods of power cuts demonstrate Eskom’s inability to supply reliable electricity to consumers. Meanwhile, the company is heavily indebted and involved in protracted negotiations over how to restructure the energy sector. This thesis argues that these challenges can be understood in the context of established rent-seeking practices. To make this argument, the thesis sets out a conceptual framework to studying the situation-specific factors that shape the allocation of state resources (as rents). This framework adapts research into productive rents and practical norms, to consider the types of rents that Eskom offers as well as the social and institutional obligations that shape rent-seeking processes and rent allocation in practice.
Using documentary analysis and interview data, the thesis outlines Eskom’s central role in the country’s MEC. In historicising rent-seeking at Eskom, it investigates the drivers of rent allocation, illustrating the limitations of assessing rents’ productivity against economic growth. The thesis identifies such drivers by examining the operationalisation of discourses around transformation and the ‘practical norms’ that shape rent-seeking dynamics at Eskom. These discourses are flexible, with nationalistic and developmental dimensions. Rent seekers can manipulate discourses around transformation to influence resource allocation. Meanwhile, shifts in working practices in Eskom’s Primary Energy Division have increased employees’ exposure to norms in the governing African National Congress around obedience and loyalty to the executive. These practical norms link job security to political fidelity, reducing institutional resilience against unproductive or extractive rent-seeking. Through these findings, the thesis contributes to scholarship on the political economy of the country’s MEC, offering a level of granularity beyond policy analysis.