The Load Shedding Impact on the South African Economy: Analyzing Price Inflation and Strategies for Post-Load Shedding Price Reductions

Main Article Content

Mokgadi Ngoepe-Ntsoane

Abstract

Years of corruption and poor management have left Eskom, the state-owned utility company, with substantial debt, hindering its ability to invest in new infrastructure and maintain existing facilities. As a result, Eskom's generating capacity falls short of meeting the country's rising demand for electricity. South Africa produces approximately 47,000 MW of electricity, yet its installed capacity is 52,000 MW, creating a significant shortfall. To manage this imbalance and protect the national electricity grid, Eskom has implemented voluntary power outages known as loadshedding. These outages have severely affected the country’s economic growth, public finances, and political stability. With loadshedding persisting for 15 years, Eskom's reliability has reached its lowest point in 97 years, causing disruptions to businesses and households, and costing the economy between R60 billion and R120 billion in 2019 alone. This study aims to deepen understanding of the policy challenges South Africa faces, particularly the economic downturn and inflationary pressures. Gaining insights into the country’s energy sector challenges is key to understanding its business environment and attracting investment for future growth. The research will include a thorough analysis of documents such as regulatory frameworks, policies, and other pertinent reports to explore the impact and complexity of loadshedding, particularly in the economic sector. The recommendations arising from this study will offer valuable guidance for improving governance and policy in this area.

Article Details

Section
Articles