Some economists say concerns are mounting that Eskom’s unreliable electricity supply is denting investor sentiment and causing outflows of capital.
This is as the rand weakened by around 1% against the dollar in Wednesday’s afternoon trade and continues to trade at its weaker level on Thursday morning at R16.25.
This is mainly due to a strengthening dollar which weakens emerging markets currencies, such as the rand.
The dollar’s strength can be attributed to the US Federal Reserve raising interest rates to bring down inflation which is at a 40-year high of 8.5%.
The rand’s weakness can also be attributed to the energy crisis and Eskom’s current rolling blackouts.
National Employers Association of SA CEO Gerhard Papenfus says small businesses are bearing the brunt of the rolling blackouts:
Stage four implemented
Eskom has announced that it has implemented stage four starting from five o’clock on Thursday morning until midnight. This will be reduced to stage two on Friday.
On Tuesday, Eskom ramped up rolling blackouts to stage six. The first and only time South Africa last endured this level of power cuts was in December 2019.
The power utility’s spokesperson Sikhonathi Mantshantsha says the grid has remained constrained because of Eskom workers’ unprotected strike.
“‘Eskom continues to closely monitor the system and will implement any changes as may be necessary. Due to the unlawful and unprotected labour action, which has caused widespread disruption to Eskom’s power plants, Eskom is unable to return some generators to service. This has compelled Eskom to continue taking precautionary measures to conserve emergency generation capacity and safeguard plants from damage. There remains a risk that the stage of load shedding may have to change at any time, depending on the state of the plant.”