Asset management firm Futuregrowth has warned that South Africa’s growth prospects for the remainder of 2023 are a cause for concern, as investors are worried about the impact of ongoing blackouts on the country’s economy.
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.
According to Investec economist Lara Hodes, wealthy and skilled individuals are leaving South Africa due to concerns about crime, power cuts, political uncertainty, and economic challenges.
Moody’s Investors Service believes that South Africa’s plan to provide debt relief to struggling power utility Eskom and potentially write off municipalities’ arrears to the company will improve liquidity and reduce funding risks for the government.