Load shedding to blame for sharp rise in repo rate
Electricity Minister Kgosientsho Ramokgopa says the sharp rise in the repo rate over the past year is a direct result of load shedding.
Ramokgopa was speaking at the Demand Side Management Indaba in Sandton on Tuesday.
“Load shedding is devastating on all aspects of our lives and when people are aggrieved and complaining we do accept that people have lost their ability to put bread on the table, businesses have closed,” the minister said.
“So people are entitled to be aggrieved and that is why we are taking every step possible to ensure we resolve load shedding in our country.”
Ramaphosa said the government is not blind to the negative impact the planned power cuts have had on the economy.
“The Reserve Bank said the repo rates have been very aggressive as a result of load shedding. The Reserve Bank has suggested that one stage of load shedding will result in the contraction in GDP by 5%, which translates to R3 billion”.
A series of hikes means has seen the repo rate jump to 125 basis points higher than it was prior to the Covid-19 pandemic.
Ramokgopa maintains the best solution to load shedding is the Energy Action Plan.
“The president unveiled the Energy Action Plan in July last year and the best opportunity to address load shedding within a short period of time is by implementing this plan. We are introducing additional technologies to help us ensure that the renewables are the best approximate base loads because they will not be able to sustain the economy on their own”.
“Rooftop solar solution is important to build sufficient and productive capacity for the country. We are introducing a financing blended facility to make it possible for the poor to benefit as well. Eskom has been given an R250 billion fiscal relief and is expected to use it for the maintenance and strengthening of the grid.”
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