South African load-shedding disaster

The latest Power Availability Statistics show South Africa experienced more blackouts in 2023 than the previous ten years – combined.

The Power Availability Statistics, compiled by independent energy analyst Pieter Jordaan, shows that the country experienced 1,296 blackout hours so far this year.

Put another way, South African households and businesses had to deal with 54 full days of no power in 2024.

Jordaan’s analysis further showed that 2023’s 1,296 blackout hours exceed the combined blackout hours of the previous ten years.

This measurement is different from tracking the total load-shedding hours to gauge the severity of the country’s energy crisis.

The total load-shedding hours show how long Eskom implemented power cuts nationwide. It, therefore, does not show the impact on an individual house or business.

Blackout hours, in comparison, show how many hours a typical household or business in South Africa did not have power.

So, while South Africans have seen 5,000 hours of load-shedding this year, a typical house of business experienced blackouts for around 1,300 hours or 26% of the time.

According to Jordaan’s projections, the official worst year of load-shedding on record is far from over, with another 31 full days of blackouts projected for the remainder of the year.

The chart below provides a snapshot of the blackout hours per year over the last five years.

Load-shedding’s impact on the economy and currency

Load-shedding has caused enormous damage to South Africa’s economic growth and the rand’s value.

The South African Reserve Bank estimated that Eskom’s daily blackouts had shaved 2% off the country’s gross domestic product (GDP) growth.

Standard Bank Corporate and Investment Banking global markets strategist Mamokete Lijane said it also affects the rand.

Lijane said strategists have blamed South Africa’s rolling blackouts as the most significant factor weighing on the rand.

Despite the damage to the economy in 2023, a positive outlook regarding load-shedding is expected to alleviate the pressure.

Electricity Minister Kgosientsho Ramokgopa said Eskom’s available generation capacity and unplanned breakdowns are improving.

“If we continue to resolve that issue – even if it’s not whittled to zero – it would increase our competitiveness and boost our rand,” Lijane said.

There’s evidence that foreign investors are responding to the slightly better power supply. Between 1 June and 15 August, non-residents were net buyers of R34.4 billion in local bonds.

During that period, blackouts reached stage 6 only three times. That’s a turnaround from May, where at least a third of the month was spent at that level.

The currency gained 2.6% against the dollar in that time, though it’s still 11% weaker this year at about 19.15 to the greenback.

The median of analyst forecasts compiled by Bloomberg sees the currency averaging R18 in the first quarter of 2024, about 6% stronger from where it is now.

Longer term, the rand’s fortunes rest on how soon South Africa can address structural challenges, said Lijane.


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