In the midst of an economic downturn largely attributable to its junk status, South Africa’s ANC-led government is now scrambling to address the pressing issue of load shedding. A sense of urgency is fueled by the fear of electoral repercussions in next year’s general elections.
The Political Implications of Load Shedding
Renowned energy analyst Chris Yelland proposes that the ruling party’s worry is not primarily the detrimental effect of load shedding on the country’s delicate economy.
According to Yelland, “This new urgency is driven ultimately not by the damages it (load shedding) is doing to the economy, but the damages it is doing politically in the forthcoming election. That is really a wake-up call for the ANC, a wake-up call for the government.”
However, ANC spokesperson Mahlengi Bhengu did not respond to requests for comments on Yelland’s observations.
An Attempt to Mitigate Stage Eight Load Shedding
Yelland’s statements come at a time when the government appears to be striving to prevent a potential escalation to stage eight load shedding, diverging from earlier forecasts of the issue reaching stage 10 or beyond.
Julius Malema, leader of the Economic Freedom Fighters (EFF), had earlier cautioned that the country could face a total blackout, a scenario yet to materialize. This situation unfolds as South Africa wrestles with the impacts of its junk status, persisting for three years now.
Government’s Response: Too Little, Too Late?
In a recent interaction with seasoned broadcaster Jeremy Maggs, Yelland acknowledged the government’s efforts in dealing with the power situation but expressed his skepticism over its sufficiency.
It’s been reported that load shedding, among other challenges, has significantly worsened the country’s macroeconomic environment in the first half of 2023. Yelland further suggested that load shedding is beginning to sting the government and the ruling party.
Electricity Minister Kgosientsho Ramokgopa disclosed in May that load shedding had resulted in over 650,000 job losses in 2022 alone, with projections of a further 800,000 layoffs if the situation continues.
Yelland warns that load shedding is unlikely to end soon due to persistently high demand for electricity and Eskom’s inability to meet that demand. He cited the absence of a long-term strategy to tackle the issue. “But we have experienced this stage six for many, many months. I think this is now where the government is starting to realize that they have to take action; otherwise, they will be punished at the elections,” he declared.
What Should Have Been Done
Yelland asserts that President Cyril Ramaphosa’s administration, in power since 2018, should have devised and implemented a comprehensive plan in the past five years to improve the long-standing power problem for the economy’s sake, not election fears.
Last July, Ramaphosa launched his five-point plan to eradicate load shedding, which included improving Eskom’s existing power stations, accelerating new generation procurement, and transforming the electricity sector, among other points.
As Yelland stresses, “Because we want the economy to grow, we need additional new generation capacity…We need a combined effort, not just the government, but the private sector can also bring in generation capacity to help Eskom.“
Beyond Load Shedding: The Elephant in the Room
While acknowledging the electricity issue, senior economist Azar Jammine notes it would take more than resolving the electricity problem to repair the damaged economy. The country’s lingering junk status is a significant concern.
Despite being in junk status, Jammine admits that eliminating load shedding would contribute to pulling the country out of its economic slump. However, he cautions, “Even if we were to do the right thing right now, it would still take four years to get out of junk status…Even if the rating agencies improve our credit ratings, we will still be in junk status for quite a while until we rise three notches and that is gonna take many years,” he explained.