800,000 South Africans can lose their jobs due to load-shedding

Electricity Minister Kgosientsho Ramokgopa said over 800,000 South Africans stand to lose their jobs due to load-shedding.

The Minister recently spoke to Eskom employees at Medupi Power Station, which recently experienced several breakdowns that plunged the company into elevated load-shedding levels.

“When Medupi coughs, the country catches a cold,” Ramokgopa said. “You coughed last week, and as you coughed, you removed two units, and as a result of that, we experienced intensified levels of load-shedding.”

The Minister explained that Medupi “stands between people’s livelihoods and prosperity” and emphasised the impact of breakdowns and subsequent load-shedding on the South African economy.

He said 640,000 people lost their jobs due to elevated load-shedding in 2022.

“At the current rate that we are going, where we have had the most days of load-shedding in 2023, we will most likely lose 840,000 jobs,” he warned.

The Outlier estimates that South Africa has experienced 6,776 hours of load-shedding in 2023, with 326 days of load-shedding so far.

This means that, on 4 December, there have only been 12 days without load-shedding this year.

The Minister has previously warned about job losses as a result of load-shedding and its cost to the economy.

He estimated the impact on gross value added to the economy would be R725 billion. 

This will have disastrous impacts on employment in South Africa, with Ramokgopa estimating that job losses due to elevated load-shedding could amount to 860,000 in 2023.

The Minister said Eskom’s inability to meet electricity demand reliably is detrimental to the government’s ability to help the poor. 

The effect of load-shedding on job losses has already been seen in South Africa’s mining sector this year.

In trading updates this year, mining companies and their CEOs have been outspoken about the deteriorating operating environment which prevents them from investing in South Africa. 

Exxaro’s coal production decreased by 11% in 2022 “due to the poor rail performance from Transnet” and the “structural constraint of inadequate electricity supply”.

Sasol attributed its declining output to South Africa’s deteriorating infrastructure and the “structural constraint” of load-shedding.

“Persistent load-shedding, infrastructure constraints, in particular, the poor performance of the national provider of rail and port logistics services […] continue to significantly impact our business,” it said.

Sibanye-Stillwater said the “increasingly supportive environment in Europe is in stark contrast to the operating environment in South Africa, which has continued to regress”.

In an operating update earlier this year, Sibanye said South Africa’s operating environment for miners is regressing due to ongoing load-shedding, the deteriorating quality of public services, and increased organised crime.

These challenges have led many local miners to reduce costs by cutting jobs, specifically in their South African operations.

Sibanye recently announced restructuring efforts that could impact over 4,000 South African jobs.

The National Union of Mineworkers (NUM) has also warned that close to 10,000 jobs could be lost between now and January 2024 as mining companies begin to issue retrenchment notices amid declining commodity prices and an inability to export their produce.

“Most companies have cited load-shedding and the continued increasing prices of electricity as reasons to issue Section 189A notices,” NUM said in a statement.