Power to the people?

SA concerned that more rolling blackouts may lead to recession

AFTER a week of the most devastating rolling blackouts in years, South Africans might have been given a respite yesterday, but experts warn this will be short-lived and the effects long-lasting.

Yesterday Eskom moved to Stage 2 load shedding, an improvement from eight consecutive days of Stage 4 blackouts.

While the state power utility was unusually tight-lipped about the uncertain state of the national power grid, energy expert Chris Yelland said it appeared the worst was over.

“But in my view this is how it is going to be for the future. You are going to have patches of load shedding and patches of non-load shedding, all depending on events and breakdowns.”

With the worst possibly over, South Africans are now trying to count the cost. Economists are warning that this latest episode cost the country billions and is drawing us closer to a recession.

These sentiments are shared by author James-brent Styan, who penned Blackout: The Eskom Crisis, in 2015.

However, some economists hold a different opinion, saying it’s too early to even mention a recession.

Styan, in his book, said the country had run into losses of R300 billion and a million lost job opportunities since rolling blackouts started in 2014.

He based his figures on data released by economist Dawie Roodt, director of Efficient Group.

Styan said South Africa could expect serious job losses and further disinvestment.

“Precise numbers are impossible because of so many variables. For example, how much is lost due to the businessman’s decision to not open a new shop? Or the factory that makes fewer products because of less power? It’s very difficult,” said Styan.

Eskom, he said, was technically insolvent and would in all likelihood report a loss of about R30 billion in the financial year to end March 2019.

“They’ve burnt about R6 billion of diesel in the past six months to try and prevent load shedding. So the outlook is dark,” he said.

However, Efficient Group economist Francois Stofberg disagreed, saying much more “upheaval” is needed before South Africa can even talk about a recession.

“If the blackouts persist, we may be heading for a recession, but our current growth trajectory of 1% is too low for a recession to happen,” said Stofberg.

Meanwhile, President Cyril Ramaphosa also weighed in over the crisis.

He yesterday appealed to all South Africans not to panic over Eskom.

“We are addressing the Eskom issue every day. I’m saying to the whole nation let’s not panic, let us join hands, close ranks and work together.”

Ramaphosa, who was on the campaign trail in Delft, said the issue would be tackled.

“That is why we are addressing it on an urgent basis. There is nothing much more urgent than restoring the power.”

Some political parties called for urgent intervention.

DA leader Mmusi Maimane said millions of jobs were at stake.

“This was inevitable, given the extent of mismanagement, corruption and bad policy that Eskom has been subjected to over the past two decades,” he said.

In an interview with Business Day, former president Jacob Zuma said the country would not have experienced the crisis if the nuclear build programme had been implemented.

“We are going to pay trillions of rand because of the problems of energy, but if we went for nuclear we will be out of spending trillions for a shorter time and we’ll make more trillions,” Zuma said.

Maimane and health spokesman Jack Bloom visited Rahima Moosa Hospital yesterday.

Bloom said hospitals had to put off elective surgeries this week.

The Gauteng government called on communities to save water, saying load shedding may have an adverse effect on water supply in some areas.

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