Alexforbes chief economist Isaah Mhlanga says 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.
Speaking to Moneyweb radio on Thursday, Mhlanga said this means the economy suffered a R12 billion blow – at least – between Tuesday and Thursday this week. Eskom has already confirmed that stage 6 load shedding will continue on Friday evening.
Mhlanga added that the total cost for the week is likely to be much higher, with stage 4 effective since Sunday, and is likely to continue into the coming weekend.
“A qualification on these numbers is that the economic impact is not linear, it can rise exponentially and the impact accumulates quickly. The point is that the cost is enormous. It’s difficult to imagine serious investors considering South Africa as an investment destination.”
Dr Francois Stofberg, senior economist at the Efficient Group, has previously estimated that the country’s economy is between 8% and 10% smaller than it could have been if we were not plagued by Eskom’s inefficiencies and ongoing load shedding.
In today’s terms, after Statistics South Africa adjusted the country’s gross domestic product (GDP) figures in 2021, the economy would, therefore, have been between R360 billion and R450 billion larger, after adjusting for things such as inflation, he said. “What is even worse is if we consider the one million lost job opportunities resulting from having a smaller economy.”
On Friday, Eskom said it has seen some recovery in replenishing its emergency reserves, but will still need to introduce stage 6 load shedding for parts of the day.
“Overnight we have replenished our emergency reserves sufficiently to not require stage 6 load shedding during the morning,” the power utility said in a statement on Friday morning.
“However, stage 6 load shedding will be implemented from 16h00-22h00 so as not to deplete these reserves any further. Stage 4 is being implemented until 16h00.”
The power utility has previously indicated that a minimum of stage 4 load shedding will need to be implemented over the weekend.