Reserve Bank’s 2023 load-shedding expectations

The South African Reserve Bank (SARB) expects South Africa to see 280 days of load-shedding in 2023 – 77% of the year.

However, this estimate seems very low as, according to the Outlier, South Africa has already had 208 days of load-shedding this year.

The SARB’s latest Monetary Policy Committee (MPC) statement, delivered on 20 July, said the expected load-shedding is 280 days in 2023.

In 2024, this is expected to decrease to 150 days. In 2025, the country is expected to see 100 days of load-shedding.

In May, the SARB revised its load-shedding expectations for 2023, adding 30 days to its previous prediction of 250 days.

Government officials have repeatedly promised that load-shedding will be reduced or be eliminated by the end of 2023.

However, experts have said these promises are little more than “false hope” as load-shedding will likely continue for the foreseeable future. 

Eskom has forecast that load-shedding will continue until 2027, with the situation likely to worsen as the performance of its coal fleet continues to deteriorate. 

This forecast was part of the utility’s medium-term adequacy report, which aims to assess electricity supply shortfalls over the next five years. 

Eskom anticipated varying levels of load-shedding throughout the next five years, warning that the “situation will worsen as the plant performance continues to trend downwards”. 

The SARB has previously estimated that load-shedding alone will deduct two percentage points from the country’s GDP growth this year. 

The Reserve Bank forecasts 0.4% GDP growth for South Africa in 2023. However, it said, “energy and logistical constraints remain binding on the growth outlook, limiting economic activity and increasing costs”.

The Reserve Bank recently revised the estimated cost per stage lower for stages 1 and 2 load-shedding. 

In nominal terms, these costs vary between R0 to R1.2 million for stages 1 and 2 and up to R204 to R899 million for stages 3 to 6 when continued on a 24-hour basis on weekdays.

It highlighted the country’s energy crisis as an ongoing upside risk to inflation, saying that electricity prices continue to present clear inflation risks in the absence of sustained and consistent increases in energy supply. 

“Load-shedding and logistics constraints may also have broader effects on the cost of doing business and living costs,” it said.

Daily Investor reached out to the Reserve Bank for comment on how it defines “days of load-shedding”. However, they did not respond by the time of publication.