Power outages devastating to the economy – South African President

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Power Outages

In light of the power outages last week that affected South Africa, President Cyril Ramaphosa admitted Monday that they had devastating effects on the economy.

“Load shedding costs our economy dearly. It causes great frustration among all South Africans and creates a hardship for households and businesses,” he said in his “From the Desk of the President” letter.

Eskom’s power stations suffered breakdowns last week, resulting in substantial losses of generation capacity across much of the country.

International financial institutions such as the World Bank and rating agencies have warned that energy shortages could hinder economic growth.

A stable and reliable energy supply is essential for economic development, according to Ramaphosa. “That is why we are focused on achieving energy security as one of our foremost priorities.”

South Africa’s energy crisis is attributable to years of old power stations that were not properly maintained, especially since these plants were made to ‘run harder’ to meet the country’s energy needs, the president said, noting insufficient investment was made in the technical skills needed to maintain and operate power plants.

“This situation was made worse by the devastating impact of state capture. Billions of Rands were diverted from critical operational requirements at Eskom into private pockets,” he said.

Ramaphosa said there has been a real transformation in the energy landscape, and Eskom’s problems are being addressed steadily. “The process of structural reforms this administration embarked on in 2018 will have an immense impact on South Africa’s energy landscape, even if the changes will take time to bear fruit.”

Eskom has already begun this reform process by setting up a separate transmission subsidiary in December 2021, with the unbundling of Eskom set for completion by December 2022.

“It is difficult and unacceptable for South Africans to endure load-shedding. But we are doing everything in our means to ensure that, like state capture, it soon becomes a thing of the past,” he said. Enditem

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