Load-shedding hurting economy more than expected – Reserve Bank 

South Africa’s energy crisis, characterized by frequent power cuts or load-shedding, has had a more significant impact on the country’s economy than initially expected.  

The South African Reserve Bank estimates that the energy disruptions reduced the nation’s economic growth rate by as much as 3.2 percentage points in 2022 and will continue to dampen output until at least early 2024.

The power cuts have been implemented by state-owned utility Eskom due to its aging and poorly maintained plants being unable to meet demand. Last year, South Africa experienced 157 days of load-shedding, more than triple the amount in 2021.  

The central bank estimates that the power cuts reduced GDP growth by 0.7 to 3.2 percentage points in 2022, with potential growth expected to be 0.0% in 2023 due to worsening load-shedding. The authors of the economic note warn that load-shedding has severe negative implications for production and overall confidence in the economy, and they anticipate a high risk of rolling blackouts persisting until early 2024.  

Major repairs, capital investments, and maintenance projects to alleviate the pressure are expected to be completed within the next 12 to 18 months. 

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