ECONOMIST SAYS LOAD-SHEDDING COSTS SOUTH AFRICAN ECONOMY UP TO 300 BILLION RAND ANNUALLY

JOHANNESBURG, Dec 1 — An economists here has suggested that the on-going power outages by national power utility Eskom have caused a total loss of production amounting to more than 300 billion Rand (about 27 billion US dollars) to the South African economy annually.

The country has been experiencing load-shedding recently, with Eskom announcing further blackouts this past weekend.

Dawie Roodt, the chief economist of financial services company Efficient Group, said here over the weekend that if the country had had uninterrupted electricity since 2008, a million jobs would have been saved.

“By then, Eskom has already started up the emergency generation of electricity. So the time we see electricity going off the damage has been done to the economy, calculating what the impact on the economy is it’s not that easy. But my calculation suggests that the South African economy would have been about 10 per cent bigger than what it actually is if we had had sufficient electricity since 2008.”

He added that an increase in electricity prices could help balance the supply and demand of electricity.
“I know this is going to be painful and very unpopular but what we need to do in the short term is to increase electricity prices,” he said.

“The reality is that there is a huge gap between the supply for electricity, the generation of electricity and the demand of electricity. And in order to balance the supply and demand we need to increase prices in the short term; what we need to do over the longer term is to break Eskom into smaller parts and commercialise it. We also we have to privatise Eskom.”

SOURCE: SABC