Eskom at risk of wiping billions from South Africa's economy

Eskom at risk of wiping billions from South Africa's economy

- Eskom risks South Africa's economy sliding into recession

- Each day of loadshedding costs the country hundreds of millions

- Sectors of the economy have had to adjust their growth forecasts downwards as a result of last weeks loadsheding

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Eskom has made sure that the lights stay on this weekend but beyond that South Africa is very nervous. Last week was arguably one of the worst Eskom and South Africa have experienced with regards to energy production.

Briefly.co.za learned that with the loss of 37% of its capacity to generate electricity, Eskom has further sunk into debt which is currently estimated at a massive R450 billion.

Eskom's is at risk of being pulled into a bottomless pit of debt and might take South Africa with it. Stage 54 loadshedding costs South Africa R775 million per day and this loss of production are compounded by higher stages have been estimated to possible cost SA R20 billion in the long term.

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The Q3 financial reports reflected a 0.6% contraction in the economy alone shocked the country.

The effects of last week's load-shedding have not yet been felt by consumers but it has been estimated to have already dropped SA's gross domestic product by 2% according to the southafrican.com.

Loadshedding affects multiple areas of the economy but some sectors are hit harder than others. The growth outlook for the following sectors has been forecast as:

Agricultural (-0.27%)
Mining (-0.19%)
Electricity, gas and water (-0.18%)
Manufacturing (-0.09%)
Transport (-0.05%)

South African Reserve Bank has painted a bleak picture of how Eskom's loadshedding has impacted the economy.

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“South Africa’s total real GDP by these sectors contracted in a number of other quarters over this period in which either none or only low-intensity load shedding occurred.”
“The results show that as the intensity of load shedding increases, South Africa’s real GDP growth decreases by a statistically significant amount. The real GVA by all of the economic subsectors displayed a negative correlation to the intensity of load shedding, too.”

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Source: Briefly.co.za

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