What is Eskom costing SA’s economy?
South Africans should prepare for ongoing, low-level load-shedding in the coming year. This will depress growth but not destroy it completely
Economists are revising their SA growth forecasts downwards for the year as concern mounts over the future of SA’s electricity supply coupled with weak domestic economic data, a slowing global economy, continued drought in parts of the country and mining unrest. In recent weeks, every piece of December’s high-frequency economic data surprised to the downside. Coming on top of sudden, unplanned stage 4 load-shedding, it seemed as if the economy had once again hit the skids. Finance minister Tito Mboweni’s grim budget failed to alleviate the gloom, as tax hikes and spending cuts will further dampen economic activity, while the R23bn annual bailout for Eskom will cover only a portion of its interest bill at a time when severe operational challenges are exacting a heavy toll on the economy. The resumption in severe load-shedding is hurting the economy, not only directly in terms of lost production, but also in terms of fixed investment and job creation forgone as businesses shelve expan...
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