Load shedding punctures SA’s buoyant economic bubble

Eskom Chief Executive Officer, André de Ruyter

by MTHULISI SIBANDA 
JOHANNESBURG, (CAJ News) WORSENING electricity supplies have put a damper on the higher – than – anticipated growth in the South African economy.

South Africa’s gross domestic product (GDP) rebounded by 1,1 percent in the first quarter of this year, which equates an annualised growth rate of 4,6 percent, according Statistics SA.

On the back of COVID-19 lockdowns, this was greater than market expectations of 3,2 percent.

Increased demand for commodities globally, the remarkable bounce-back in the finance, real estate and business services sector inspired the growth.

“We see scope for some of this positive momentum to continue throughout the year and thus that our current expectation for growth of 3,7 percent in 2021 is probably a bit too low,” said Siobhan Redford, economist at the Rand Merchant Bank (RMB).

Nonetheless, worsening power cuts have dampened such prospects.

Redford added, “However, it is important to bear in mind that should economic activity ramp up faster than expected, we could find the electricity supply constraint increasing faster as well.”

She mentioned thus far, South Africa has had load-shedding over seven consecutive months and it does not feel like this trend will end anytime soon.

This is particularly so as the embattled Eskom has announced continuous load-shedding until Sunday.

“These capacity constraints will continue for the foreseeable future and all South Africans are urged to reduce their use of electricity,” Eskom stated.

The maligned entity apologised for the “inconvenience and uncertainty” caused by interruptions in the electricity supply.

The Democratic Alliance (DA), blamed the ruling African National Congress (ANC).

“The announcement of stage 4 rolling blackouts by Eskom once again shows how desperately South Africa needs change,” said Chaleb Cachalia, DA Shadow Minister of Public Enterprises.

– CAJ News

 

 

 

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