By Lehlohonolo Lehana.
Cabinet has expressed “regret at the intermittent load-shedding”, saying an announcement on Eskom’s energy crisis will be made soon.
“Cabinet expressed regret that load-shedding is happening at the time when government is vigorously engaged with the interventions announced by President Cyril Ramaphosa in July to overcome the surmountable energy crisis facing the country,” said cabinet in a statement.
Ramaphosa’s meeting with his cabinet comes after he cut short an overseas trip to the US and the UK to deal with Eskom’s rolling blackouts.
Cabinet has acknowledged the problem of load-shedding that has over the past week disrupted the economic activities of businesses and inconvenienced households in the country.
However public enterprises minister Pravin Gordhan presented a briefing on the capacity of Eskom and a progress report from the technical committee of the national energy crisis committee.
Cabinet is still deliberating on these reports, and after further interventions announcements will be made.”
The latest high-level rolling blackouts in South Africa are taking its toll on various fundamental sectors of the economy.
Eskom announced further load shedding on Wednesday (21 September) at stage 5. The power utility said that it is necessary to continue at stage 5 to limit the use of the emergency generation reserves.
The country’s economy is facing an unprecedented scenario with load shedding not only impacting food security and mobile networks, but business sectors and industries at large.
Earlier this month (6 September), Stats SA reported that the country’s gross domestic product decreased by 0.7% in the second quarter of 2022 – much of this decline was attributed to rolling blackouts which hobbled economic output.
The Bureau of Economic Research noted this week that the current round of load shedding is likely to have a similar impact on the nation’s GDP in the third quarter.
“The intensity of the current power cuts threatens the GDP recovery from the 0.7% q-o-q contraction experienced in 2022 Q2. It also serves as another reminder of the urgency to fast-track increased private sector power generation, including securing funding for this,” said the BER.
Alexforbes chief economist Isaah Mhlanga said Eskom’s prolonged stage 6 load shedding has already caused significant damage to the country’s economy, with over R4 billion wiped from the GDP for each day it continues.
If it were not for Eskom’s failings, the country’s economy could be between 8% and 10% larger, said Francis Stofberg, senior economist at the Efficient Group.