South Africa’s Energy Crisis in Perspective.
It is least surprising that electricity generation has decreased by 20% since 2007. In the 3rd quarter of 2022, power outages were at 47.7% of the time (an average of 14.8 calendar days per month).
Hello friends. A warm welcome to new readers and subscribers. I am glad you are here!
It is widely accepted that energy remains one of south Africa’s greatest socio-economic bottlenecks. As per the South African Reserve Bank (SARB), electricity load-shedding has increased from 9.7% of the time (an averaged of 3 calendar days per month) in 2015, to 33.4% of the time (an average of 10.4 calendar days per month) in 2022. At peak in the 3rd quarter of 2022, power outages were at 47.7% of the time (an average of 14.8 calendar days per month).
It is least surprising that electricity generation has decreased by 20% (as of now) since 2007 to date.
In the 3rd quarter of 2022, the country recorded a GDP print of R1161 billion (latest GDP print) as reported by stats sa. Although, an expansion of 1.6% compared to the previous quarter = Q2 2022, the impact of load-shedding on consumers and businesses is crippling. SARB reports that power outages have a -0.00056% impact on quarterly GDP, equating to R650 million of lost GDP in Q3 last year. On top of poor infrastructure, Eskom’s debt book further threatens economic growth considering the government has adopted part of Eskom’s debt as announced in the 2022 medium term budget. Murendeni wrote well on this dynamic.
With The world economic forum’s 2023 global risk report identifying the “collapse of services and public infrastructure” as the second risk along with debt, after state collapse for SA, the risk for economic downturn remains highly elevated. The same old “pessimistic in the short run, but optimistic long after” is the default sentiment, but it soon begs the counter argument highlighting the prolonged patience the country has had on debilitating public infrastructure.
Talk to you soon.