Load shedding reduces SA’s growth by 3.2 percentage points

South Africa’s energy crisis may have reduced the nation’s economic growth rate by as much as 3.2 percentage points last year.

1. The country had 3,776 hours of load shedding in 2022, more than triple the amount in 2021.
2. The outages surpassed the cumulative totals for 2019 and 2020 by mid-February 2023.
3. The central bank’s models estimate that power cuts trimmed between 0.7 percentage points and 3.2 percentage points off the GDP growth rate in 2022.
4. Potential growth was estimated at about 0.7% last year.
5. Given that load shedding is expected to be worse in 2023, potential growth is forecasted at 0.0% in 2023.
6. Major repairs, new capital investment and maintenance projects that could alleviate the pressure are only expected to be completed over the next 12 to 18 months.
7. The risk of rolling blackouts is expected to remain high this year and into early 2024.