Loadshedding will negatively affect SA’s economic recovery: SACCI

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The South African Chamber of Commerce and Industry (SACCI) says the current loadshedding crisis will have a huge impact on South Africa’s economic recovery from COVID-19.

Eskom on Wednesday afternoon announced it would be implementing Stage 4 loadshedding because of additional generating unit breakdowns and high winter demand.

Eskom spokesperson Sikonathi Mantshantsha explains Stage 4 loadshedding: 

Job losses

The Chamber, which represents more than 20 000 small and medium-sized businesses, warns that companies are struggling with the current power cuts and this will lead to additional job losses.

“We have seen the GDP improving obviously of a very low base given COVID-19 in the last year. But Eskom really gives a significant danger in that economic recovery. It’s a situation, if it prevails, that people will lose a lot of jobs because businesses cannot sustain. We are still in a lockdown somewhat and people are only beginning to see some light at the end of the tunnel, the vaccination program, and what we actually can’t have now is a huge energy crisis,” says SACCI Chief Executive, Alan Mukoki.

Several units at Medupi and Duvha were reported out of action on Wednesday. This plunging most parts of the country into another darkness and a cold evening for 8 hours.

Stage 4 will see South African households and businesses without power for at least 4 hours on a rotational basis.
Economists say that loadshedding costs the country’s economy R17-million loss per hour.

‘Urgent solution’

Economists share the same sentiment that persistent loadshedding will cripple South Africa’s economic recovery if there is no urgent solution being found to the planned power cuts.  Economist Mike Schussler says loadshedding is very bad for the economy.

“When we have loadshedding in South Africa, every kilowatt-hour passes R17 is lost to the economy. You are probably talking R17 million per hour lost to the economy in the daytime, it’s a bit more and at night it’s a bit less. If the loadshedding continues at Stage 4 pace it’s going to be damaging to the economy. Obviously, with four stages, we are looking at an R68 million loss. But if the loadshedding continues, it is going to be very damaging to the economy and in some cases, even water shedding is against us.”

‘Detrimental to all types of business’

Business Unity South Africa (BUSA) says stage four load shedding will have a detrimental effect on businesses as they are still trying to recover from the COVID 19 pandemic. BUSA CEO Cas Coovadia says this is bad for an economy that is already on its knees.

“In an economy that’s barely growing, the business has just started coming out of COVID. And we are in a midst of a third wave of COVID now. And we have been warned by Eskom that this is going to take a while. Not having power is detrimental to all types of business.”

In the video below is the reaction to stage 4 loadshedding by Energy Expert Ted Blom:

Here is a bird’s-eye view of Johannesburg as Stage 4 loadshedding hits SA: Mbongeni Muthwa