South Africa

We are in serious trouble in South Africa – economist


Efficient Group chief economist Dawie Roodt says South Africa is in a real economic crisis which can lead to public violence.

“The economy is not growing. We have high levels of unemployment and poverty, and I am concerned about public violence seen two years ago,” he said.

Speaking to Business Day TV, Roodt said the country is facing a toxic mix. “We are in serious trouble in South Africa,” he said.

Part of the problem is the lack of electricity and load-shedding, which hampers economic growth and job creation.

To respond to the electricity crisis and its effects, President Cyril Ramaphosa announced the declaration of a national state of disaster during his State of the Nation (SONA) last week.

Ramaphosa said the state of disaster would enable them to accelerate energy projects and limit regulatory requirements to address the problems at Eskom.

The president will also appoint a Minister of Electricity in The Presidency to oversee all aspects of the electricity crisis response.

Dawie Roodt
Efficient Group chief economist Dawie Roodt

Roodt is not convinced that these measures will help resolve Eskom’s problem and the energy crisis.

He said the president should have announced his new cabinet before the SONA to let people know who would implement the promised plans.

Roodt added that the new Minister of Electricity would complicate decision-making and confuse matters.

“We now have a Minister of Electricity, a deputy president responsible for electricity, a minister for state-owned enterprises responsible for Eskom, and an energy minister responsible for energy,” he said.

“When everybody is responsible for everything, nobody is responsible for anything. That is the real concern here – I don’t think we will make much progress.”

Another problem is that there is an election around the corner, preventing politicians from making tough decisions.

Without tough decisions, it is unlikely that Eskom and the electricity crisis will be resolved.


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