South Africa passes 200 days of power outages as 2022 draws to a close

South Africa has endured 200 days of power outages in 2022 as of Tuesday, with more to come.

Eskom has had record-breaking rotational blackouts this year because its old and poorly maintained power plants are constantly failing. Energy shortages have hampered investment and weighed on production.

“The fluctuations in electricity supply are having a profound impact on the economy and could be seen as the greatest risk to growth and hence the future of South Africa,” said Magda Wierzycka, Sygnia’s chief executive, in an email reply to questions.

The South African Reserve Bank said last month that power outages mean the economy is likely to grow just 0.1% in the final quarter. It forecasts economic growth to slow to 1.1% in 2023 from 1.8% this year, and it expects increased electricity rationing to reduce production by 0.6 percentage points.

AndrĂ© de Ruyter’s resignation as Eskom’s CEO gives South Africa the opportunity to hire a competent and experienced CEO who has the necessary political support, Wierzycka said. “It will not be easy to find someone who is suitable, but the government cannot afford to make mistakes again.”

Eskom provides most of the country’s electricity and doesn’t generate enough revenue to cover its operating costs and interest bills, leaving it dependent on government bailouts to survive.

The outgoing CEO warned on Friday that the outlook for electricity next year will be very limited and the power outages will continue until another 4,000MW to 6,000MW of generation capacity is connected to the grid. — With the support of Renee Bonorchis and Amogelang Mbatha.

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