Load-shedding far worse for economy than stated 

Load-shedding, the controlled power outages in South Africa, is having a more severe impact on the economy than officially estimated, according to Kevin Lings, chief economist at Stanlib.  

The South African Reserve Bank (SARB) had estimated that load-shedding would cost the country 2% of GDP growth in 2023. However, Lings believes the impact is even worse, as the cost of lost investment and growth opportunities cannot be accurately quantified.  

Companies and investors are putting investments on hold or moving them to other African countries, resulting in a loss of employment, investment, and tax revenue for South Africa. Load-shedding dominates discussions with foreign investors and undermines confidence in the country’s ability to solve the electricity supply problem.  

The SARB expects the impact of load-shedding on GDP to decrease in 2024 and 2025 due to increased private sector investment in backup power and alternative energy sources. However, the trajectory for fixed investment remains subdued due to low business confidence, ongoing load-shedding, and political uncertainties.  

The SARB called on the government to implement reforms in the electricity and logistics sectors to encourage private sector investment and boost growth. 

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