Latest bout of load shedding ‘coming at wrong time’
Chief economist at Efficient Group Dawie Roodt has warned that the country's rolling blackouts will only worsen an already bad situation.
This after Eskom implemented stage 2 load shedding over the weekend.
The power cuts are expected to last a week, hitting residents and businesses hard.
The latest bout of load shedding comes at a time when the country is still recovering from economic ruins, especially after the impact of Covid-19 and the July unrest.
Roodt says load shedding is likely to further slow economic recovery.
"As we all know the South African economy is going through a very difficult time. At the moment things are looking a little upbeat because of technical reasons, like the very strong commodity cycle, but the reality, if you stand back a little bit, is that the South African economy has been under tremendous pressure for many, many years," he explains.
Roodt adds it's difficult to quantify the amount of damage to the economy.
"It really depends on how long it's going to go on and how severe it's going to be but it's quite possible that we can talk about the significant impact on economic growth because of the load shedding.
"It's coming at the wrong time, it's coming at a time when the South African economy is quite vulnerable and I must say, it will also put further downward pressure on economic growth in the South African economy for quite some time.”
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According to Roodt, agriculture has fared well in the last few months.
But he believes the mining sector would have done better were it not for the power cuts, while manufacturing will remain negatively impacted by the intermittent supply of power.
"At a time when commodity prices are quite high and doing quite well, that's when we want to have cylinder firing in the mining industry. Unfortunately, that's not going to happen.
"Although mining will continue to do well, they could have done so much better if we had sufficient electricity."
Finance Minister Enoch Godongwana has postponed the mid-term budge policy speech from November 4 to a week later on November 11.
Roodt says the postponement is not necessarily a sign of a crisis.
"I don't see anything really untoward in his postponement of the budget policy statement.”
