Contact Info

The big load shedding risk facing South Africa in 2019

There are a number of local factors which will likely impact South Africa’s growth in 2019.

However, Eskom has emerged as the single biggest risk facing the country in 2019, amid growing concerns of more load shedding and rising debts.

Speaking to the Sunday Times, Annabel Bishop, chief economist at Investec, said that there were a number of reasons why analysts are growing increasingly cautious of the state-owned enterprise.

“SOEs remain a key concern, especially Eskom,” she said.

“Given the parlous state of Eskom’s financial position, load shedding could persist into 2019 and if it was as extreme as in early 2008, GDP for Q1 2019 could see growth cut by as much as a third to a half.”

According to Bishop, some of the risks currently facing Eskom include:

  • Debt of more than R100 billion;
  • Almost 1,000 corruption cases against employees at all levels in the company;
  • Supply constraints for coal needed to generate electricity that led to a bout of load shedding towards the end of 2018;
  • Constant changes in management.

‘Load shedding on leave’

In December Eskom announced that the risk of load shedding would be low through to 13 January 2019 as businesses and industries closed shop for the holiday period.

As part of its bid to keep the lights on over the holidays, public enterprises minister Pravin Gordhan said that leave for managers was cancelled, and it would be all hands on deck over the period.

“When we come back to work in mid-January up until the end of March we ideally want to tell the public that there will be no level 2 load shedding,” Gordhan said.

Instead, Gordhan said that Eskom may introduce a greatly reduced ‘quarter level’ load shedding during this period.

He also pledged that Eskom would be better at communicating load shedding schedules and which areas will be impacted.

Read: Eskom said to be extending job cuts beyond management