Andrew
South Africa’s worst week of load shedding, with Friday marking the fourth straight day of Stage 6 rolling blackouts, is going to hit the economy hard.
While the actual economic impact is yet to be calculated, economists and business leaders are already warning that the toll will run into billions of rands and will have other ramifications such as lost investment, a negative impact on SA’s already sub-investment grade credit rating and deteriorating business – and consumer confidence levels.
The last time SA had Stage 6 load shedding was on December 9, 2019 and it lasted for less than a day.
Last week’s crisis comes off the back of a wildcat strike by Eskom workers, which saw load shedding going to Stage 4 on Sunday and Eskom then being forced to escalate it to Stage 6 on Tuesday, after most of its staff did not pitch for work.
At Stage 4 load shedding alone, Nova Economics calculates that the economic cost amounts to around R950 million a day. At Stage 6, this is likely to be closer to R1,5 billion a day.
Other economic impact estimates are higher.
Speaking on Moneyweb’s SAFM Market Update radio show on Thursday night, Alexforbes chief economist Isaah Mhlanga said Stage 6 load shedding alone may have already cost the economy R4,1 billion a day.
On Thursday, the JSE closed over 2 percent weaker, weighed down by the extension of Stage 6 load shedding and uncertainty around possible further strike action at Eskom.
However, concerns around a global recession following moves to curb inflation also contributed to the JSE’s slide.
The rand also extended its losses against the US dollar, trading around R16,30 to the greenback after starting the week around R15,86.
The weakening rand spells more bad news for South Africans and Eskom, with more fuel price hikes expected this week both for petrol and diesel. − Moneyweb..
Online Reporter