Economist Worries High Cost of Living Will Increase Social Tensions Across South Africa

• An economist fears that South Africa could see an increase in social tensions as the cost of living steadily increases
• The country has been subjected to weakening economic growth, high unemployment and increasing electricity and food prices
• South Africans will also be subjected to an increased electricity tariff that will come into effect from Saturday, April 1

JOHANNESBURG - As the cost of living for South Africans continues to steadily increase, an economist worries that social tensions may also rise.

The country has been subjected to weakening economic growth, high unemployment and increasing electricity and food prices. Severe loadshedding has also threatened water supplies and the security of small businesses across the country.

Efficient Group economist, Dawie Roodt, told EWN that while annual inflation dropped in December, food inflation remained high. He said it was especially worrisome for poorer South Africans who spend most of their earnings on food.

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Roodt said the combination was a “very toxic mixture” and everyone should be concerned about increased violence and public strikes. He said he was quite worried about the run-up to the national elections when politicians make promises.

South Africans will also be subjected to an increased electricity tariff that will come into effect from Saturday, April 1. The hikes will affect all Eskom customers including municipalities.

According to BusinessTech, citizens who get their electricity from municipalities are expected to be more affected. Local governments and utilities add markup and rates to the initial price and will implement hikes from Saturday, July 1.

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Briefly News also reported that South Africa is on the brink of an electricity emergency due to a large energy generation gap and the unavailability of units at Eskom’s power stations.

The state-owned power utility is working hard to obtain the diesel needed to run its open-cycle gas turbines (OCGTs). The procurement of diesel is the only viable solution to the country’s electricity woes as fuel could completely run out by the end of the month.

In an interview with EE Business Intelligence, Eskom chief operating officer Jan Oberholzer said the power utility needs an additional 200 million litres of diesel to keep its operation running until the end of March. However, he said more or less diesel may be needed, depending on unplanned breakdowns.

Source: Briefly News