South Africa’s electricity crisis is costing the economy as much as R899 million per day, according to central bank estimates.
Rolling blackouts of about 6 to 12 hours a day, or so-called stage 3 and stage 6 outages, detract between R204 million and R899 million from the economy daily, the South African Reserve Bank said in an emailed response to questions on Monday.
Power cuts, known locally as load shedding, are needed to protect the grid from collapse when state-owned company Eskom’s ageing and poorly maintained and mostly coal-fed plants can’t meet demand.
The company, which produces almost all of South Africa’s electricity, has imposed stage 6 cuts, the most severe yet, for ten days so far this year, according to Bloomberg calculations.
The Reserve Bank lowered its annual economic growth forecast to 0.3% from 1.1%, with Governor Lesetja Kganyago saying power disruptions will shave two percentage points off output growth.
It predicts that electricity will be rationed for 250 days in 2023, which, if realized, will be a record.
While outages have affected the country for about 15 years, Africa’s most industrialized economy is now experiencing its worst bout of power rationing yet with cuts occurring for more than 200 days in 2022 and every day this year.
Blackouts are likely to continue for at least two more years as Eskom overhauls its electricity-generating fleet.
Eskom has repeatedly said an additional 4,000 to 6,000 megawatts of electricity generating capacity are needed to end the load-shedding.
President Cyril Ramaphosa is expected to announce measures to address the crisis in his state of the nation address on Thursday.
In January, the country’s National Energy Crisis Committee was planning a new law to fast-track plant development. The body is run out of the president’s office.