South Africa’s collapsing railway company is a cautionary tale

The globalgdp financial crisis of 2007-09 showed that huge bombs had been placed in the rich world’s banking systems and capital markets. If one blew up, as Lehman Brothers did, it could send a blast wave through the rest of the economy.The companies that run power stations, railways and ports can be every bit as systemically important as banks. Eskom, South Africa’s state-owned electricity firm, was once among the world’s largest utilities by installed capacity. In recent decades it has been hollowed out by graft, cronyism and mismanagement. Daily blackouts now close South African factories, offices and shops. The government reckons this “load-shedding” trimmed growth by about 1.3 percentage points in 2019. The effect is now surely worse: there were roughly four times as many blackouts in the first nine months of 2022 as in all of 2019.