Facing the Load-shedding Bill This year, South Africa braces for a potential financial hit estimated at a jaw-dropping R1.6 trillion, a result of persistent load-shedding. To put things in perspective, that’s a hefty R400 billion more than last year’s tally.
The Economic Toll: By the Numbers
- Cost of load-shedding: R1.6 trillion in economic loss
- Gross value addition: R725 billion
- Potential job losses: 860,000
During a lecture held at the University of Pretoria, Electricity Minister Kgosientsho Ramokgopa shed light on the grim economic repercussions of load-shedding. He stated, “Eskom’s inability to meet electricity demand reliably is detrimental to the government’s ability to help the poor.”
Unemployment: The Silent Crisis With a staggering unemployment rate of nearly 33% – the highest globally – South Africa faces an immense challenge. Dive deeper, and the youth unemployment figure is even more alarming, with 75.1% out of the labor market. The United Nations Development Programme (UNDP) rings warning bells on this issue, highlighting the potential for societal unrest. The UNDP report emphasized, “Youth unemployment in South Africa is a multipronged challenge… There is no doubt that the high unemployment rate is a ticking time bomb.”
The Silver Lining: Economic Resilience But it’s not all gloom and doom. Signs indicate that the nation’s economy is building resilience against load-shedding setbacks. The private sector, in particular, is gradually weaning itself off Eskom’s unreliable grid. This shift, coupled with private electricity suppliers ramping up their production, paints a hopeful picture. When probed by BusinessDay, the Electricity Minister’s office revealed that their predictions were based on April’s modeling. This implies that the actual load-shedding fallout might not be as dire as predicted.
Sector Insights Isaah Mhlanga, a market research expert at RMB, shared a noteworthy observation: Despite escalating load-shedding, the manufacturing sector remained surprisingly stable. Historically, heightened load-shedding periods saw a slump in manufacturing output. Mhlanga accredits this stability to the burgeoning electricity supply from the private sector. He optimistically stated, “In the future, we will have less and less of an impact on economic output from the unstable electricity supply.”
Harnessing the Sun: Solar’s Meteoric Rise Eskom’s data shows a promising trend in solar energy, with installed capacity doubling in just a year. It rocketed to 4,400 MW by June 2023, up from a mere 1,000 MW in March 2022. Contrary to the initial estimates of 2,500 MW solar generation capacity for 2023, the country clocked over 4,000 MW in just half the year. Mhlanga hailed this solar surge, noting its potential for further growth.
Conclusion: An Economy Adapting & Evolving Recent data from Absa paints a picture of an economy growing resilient to the menace of load-shedding. As we delve into these figures and trends, there’s an underlying narrative of adaptability and innovation. South Africa, though grappling with energy challenges, is showcasing its resilience and an impressive ability to pivot.