The latest high-level rolling blackouts in South Africa are taking its toll on various fundamental sectors of the economy.
Eskom announced further load shedding on Wednesday (21 September) at stage 5. The power utility said that it is necessary to continue at stage 5 to limit the use of the emergency generation reserves.
The country’s economy is facing an unprecedented scneario with load shedding not only impacting food security and mobile networks, but business sectors and industries at large.
Earlier this month (6 September), Stats SA reported that the country’s gross domestic product decreased by 0.7% in the second quarter of 2022 – much of this decline was attributed to rolling blackouts which hobbled economic output.
The Bureau of Economic Research noted this week that the current round of load shedding is likely to have a similar impact on the nation’s GDP in the third quarter.
“The intensity of the current power cuts threatens the GDP recovery from the 0.7% q-o-q contraction experienced in 2022 Q2. It also serves as another reminder of the urgency to fast-track increased private sector power generation, including securing funding for this,” said the BER.
Alexforbes chief economist Isaah Mhlanga said Eskom’s prolonged stage 6 load shedding has already caused significant damage to the country’s economy, with over R4 billion wiped from the GDP for each day it continues.
If it were not for Eskom’s failings, the country’s economy could be between 8% and 10% larger, said Francis Stofberg, senior economist at the Efficient Group.
But aside from the damage done to the economy in general, specific sectors are now sounding alarms over the harm caused by Eskom’s load shedding.