South Africa passed 200 days of power cuts in 2022 on Tuesday, with more to come.
Eskom has implemented record rotating blackouts this year as its old and poorly maintained power plants continually break down. The energy shortage has affected investment and weighed on production.
“Fluctuations in electricity supply have profound implications for the economy and could be seen as the biggest risk to growth and therefore the future of South Africa,” Sygnia Chief Executive Magda Wierzycka said in a response by email questions.
The Reserve Bank of South Africa said last month that the power cuts mean the economy is likely to only expand by 0.1% in the latest quarter. It predicts that economic growth will slow to 1.1% in 2023 from 1.8% this year and assumes that increased power rationing will cut output by 0.6 percentage points.
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The resignation of André de Ruyter as Eskom’s CEO provides South Africa with an opportunity to bring in a skilled and experienced CEO who has the necessary political support, Wierzycka said. “It won’t be easy to find someone suitable, but the government cannot afford to be wrong yet again.”
Eskom supplies most of the country’s electricity and does not generate enough revenue to cover its operating costs and interest bill, leaving it dependent on state bailouts to survive.
Its outgoing CEO warned on Friday that power supply prospects for next year will be very limited and blackouts will continue until an additional 4,000MW-6,000MW of generation capacity is added to the grid. — With the assistance of Renee Bonorchis and Amogelang Mbatha.
