South Africa's Economy Loses Momentum Amid Record Power Cuts

[jpr9954]

https://www.imf.org/en/News/Article...economy-loses-momentum-amid-record-power-cuts

South Africa's Economy Loses Momentum Amid Record Power Cuts​

By the South Africa Team, IMF African Department
June 15, 2023

Reforms are urgently needed to resolve the energy crisis and tackle structural unemployment

Newly released data shows the South African economy grew by 0.4 percent between January and March this year. Crippling power cuts, volatile commodity prices and a challenging external environment have contributed to the country’s weak growth performance.

By year-end, we project real GDP growth to fall sharply from last year. Though we expect growth to pick up again in 2024, the pace is too slow to reduce unemployment, which at 32.9 percent remains close to an all-time high.

The country has faced rolling blackouts after years of mismanagement of the state-owned utility, Eskom, prompting the authorities to ease the registration process and licensing requirements for energy production to encourage private sector investment. The government also announced a three-year debt relief arrangement to help Eskom establish its commercial viability and mitigate the energy crisis.

Additional far-reaching reforms are needed to achieve job-rich, inclusive, and greener growth. These include improving the country’s energy and logistical constraints, reducing barriers to private sector investment, addressing structural rigidities in the labor market, and tackling crime and corruption.

The country’s elevated public debt level—one of the highest among emerging markets—limits the government’s ability to respond to shocks and meet growing social and development needs. Stabilizing the country’s debt and creating room in the budget for targeted social spending and public investment will require reducing the government wage bill and transfers to state-owned enterprises.

Like elsewhere, persistently high food and energy prices have pushed up inflation and raised inflation expectations. Monetary policy normalization should continue to keep inflation expectations anchored and bring down headline inflation to the midpoint of the South African Reserve Bank’s 3–6 percent target range.

 

[skydiver386]

When you have a Country run by the African National Communists, what do you expect?

 

[degoins]

When you have a Country run by the African National Communists, what do you expect?

And as long as they're in charge it will only get worse.

 

[0002S]

Who knew growth takes energy?

 

[steve white]

https://www.imf.org/en/News/Article...economy-loses-momentum-amid-record-power-cuts

South Africa's Economy Loses Momentum Amid Record Power Cuts​

By the South Africa Team, IMF African Department
June 15, 2023

Reforms are urgently needed to resolve the energy crisis and tackle structural unemployment

Newly released data shows the South African economy grew by 0.4 percent between January and March this year. Crippling power cuts, volatile commodity prices and a challenging external environment have contributed to the country’s weak growth performance.

By year-end, we project real GDP growth to fall sharply from last year. Though we expect growth to pick up again in 2024, the pace is too slow to reduce unemployment, which at 32.9 percent remains close to an all-time high.

The country has faced rolling blackouts after years of mismanagement of the state-owned utility, Eskom, prompting the authorities to ease the registration process and licensing requirements for energy production to encourage private sector investment. The government also announced a three-year debt relief arrangement to help Eskom establish its commercial viability and mitigate the energy crisis.

Additional far-reaching reforms are needed to achieve job-rich, inclusive, and greener growth. These include improving the country’s energy and logistical constraints, reducing barriers to private sector investment, addressing structural rigidities in the labor market, and tackling crime and corruption.

The country’s elevated public debt level—one of the highest among emerging markets—limits the government’s ability to respond to shocks and meet growing social and development needs. Stabilizing the country’s debt and creating room in the budget for targeted social spending and public investment will require reducing the government wage bill and transfers to state-owned enterprises.

Like elsewhere, persistently high food and energy prices have pushed up inflation and raised inflation expectations. Monetary policy normalization should continue to keep inflation expectations anchored and bring down headline inflation to the midpoint of the South African Reserve Bank’s 3–6 percent target range.

Well, duh....

 

[Doubleplay]

With daily 6-10 hour load shedding it amazes me they can still grow .04 percent.

 

[leslie hetrick]

with all that south africa has to offer its a damn shame the government can,t get it together. i have hunted their six times and have loved every minute of it and the africans i interacted with.

 

[Puddle]

It's the amateur hour that just keeps on giving...

 

[degoins]

It's the amateur hour that just keeps on giving...

and those amateurs will never advance......

 

[fourfive8]

Yep, I just saw where their leadership just lassoed the rising star of Hamas and the Palestinians.

 

[TheGrayRider]

I was just in South Africa in September and experienced the load shedding. The outfitter is trying to go 100% solar and wind in the future so he doesn’t have to count on his government and their policies.

 

[JimmyJack54]

Upon arrival in Johannesburg (JNB) on October 5th I expeditiously proceeded from the back of the airplane to Passport Control. When I arrived, I was three rows deep in the non-RSA citizen que. After 10 minutes or so only a few people were processed through by the two or three agents working. At that point all passport processing of foreign and domestic citizens was completely stopped. By this time all remaining rows in our que were full and the line stretched back towards the escalators. Their system was “offline” some airport personnel told me. They said it could be back on in a few minutes to a few hours. Ultimately, I was processed through approximately 1hr 45minutes later.

Speculation was that the system was down due to load sharing. Regardless, JNB is a primary hub for all of Southern Africa and the fact that they can’t keep their passport system online boggles my western mind. It does seem that South Africa is digressing in several ways.

We experienced loss of power at out safari camp (Limpopo) due to load sharing but it wasn’t much of an inconvenience for me. It seemed to follow a posted schedule where the camp staff could manage around it. Water wells had been converted to solar and some limited lighting in camp. A diesel generator was available if needed but we didn’t have to use it. My outfitter plans to convert his lodge to solar as the cost of panels, but especially battery storage, decrease.

 

[fourfive8]

Hope the strange bedfellows of BRICS works out for RSA. The ‘enemy of my enemy’ makes for the most fickle of fair weather friends.

 

[DonPablo]

My PH was telling me about the railroad they were building in Limpopo to service the coal plant out there. Quit in the middle with a lot of the infrastructure already built. You’d think someone with big $ would step in and take it over. Surely they would purchase at a huge discount. Or if the government had any sense (tongue in cheek here), they would offer some type of subsidy to prospective investors. Would only help their power issues.

 

[YancyW]

The load sharing isn't really an issue once in camp, most all have backups for deal with the inconsistencies that come with doing business there, but losing power in the major urban areas while in transit could be a major pain in the ass.

 

[Safari Dave]

I really hope my South African friends have an exit strategy.

I truly hate it, but I'm very much afraid that you are going to need, it at some point.

Don't fall victim to "Recency Bias".



The entire world, will turn on RSA whites.



There will be nothing that any "like-minded" people can do to help you.

 

[Hyde Hunter]

in April my PH had just installed a large solar system and the day we left they came to complete the wiring, now he is all good to go. The small town we drove thru a few times was all abuzz with the sound of generators running so they could stay in business.

 

[Nkawu]

I really hope my South African friends have an exit strategy.

I truly hate it, but I'm very much afraid that you are going to need, it at some point.

Don't fall victim to "Recency Bias".



The entire world, will turn on RSA whites.



There will be nothing that any "like-minded" people can do to help you.

I left South Africa to pursue further education abroad and end up staying in the UK for 6 years. I decided in 2021 that I wanted to move back home to SA. I arrived just in time for the Durban riots. I couldn’t believe how bad the load shedding and crime and corruption had become. It was at the point where some people didn’t even bother to put a number plate on their cars or stop at red traffic lights because they know there would be no repercussions. My mum still lives there so I put her house onto a solar borehole and she has put the rest of the house onto solar too. I left in late 2022 back to UK with no plans to return. In my mums area thugs have damaged the local water infrastructure so that they can win contracts to ‘do repairs’ and tanker water in- thank goodness for the borehole! The beaches are full of E.Coli because the sewerage treatment systems have collapsed. There is 4-6h a day of power cuts, and desperate people are breaking into homes at night to steal. A friends car was stolen two weeks ago and was seen to be in Zimbabwe the same day via a tracking pod left in one of the kids school bags in the boot.

I miss my home terribly but as this stage it has nearly become unrecognisable to me and I don’t see how anyone could run a business or safely raise a family.

 

[Pondoro]

I left South Africa to pursue further education abroad and end up staying in the UK for 6 years. I decided in 2021 that I wanted to move back home to SA. I arrived just in time for the Durban riots. I couldn’t believe how bad the load shedding and crime and corruption had become. It was at the point where some people didn’t even bother to put a number plate on their cars or stop at red traffic lights because they know there would be no repercussions. My mum still lives there so I put her house onto a solar borehole and she has put the rest of the house onto solar too. I left in late 2022 back to UK with no plans to return. In my mums area thugs have damaged the local water infrastructure so that they can win contracts to ‘do repairs’ and tanker water in- thank goodness for the borehole! The beaches are full of E.Coli because the sewerage treatment systems have collapsed. There is 4-6h a day of power cuts, and desperate people are breaking into homes at night to steal. A friends car was stolen two weeks ago and was seen to be in Zimbabwe the same day via a tracking pod left in one of the kids school bags in the boot.

I miss my home terribly but as this stage it has nearly become unrecognisable to me and I don’t see how anyone could run a business or safely raise a family.

I see your dilemma...but what about relocating to Botswana..or Namibia..? From what I have seen Bots is much better than SA..always felt safe in both Bots and Nam..

 

[skydiver386]

I heard South Africa is the land of milk and honey.....just remember to bring your own cow and bee.