South Africa hit by blackouts as state utility struggles

JOHANNESBURG (AFP) – South Africa was hit by rolling blackouts yesterday in a blow for the continent’s most developed economy as it shows signs of rebounding.

Embattled power company Eskom, which generates around 95 per cent of the country’s electricity, announced power rationing – infamously known as load-shedding – would be implemented from 9am to 11pm.

The stage two load-shedding was “in order to protect the power system from a total collapse,” the state utility said in a statement.

Rolling blackouts in February and March saw factories and homes plunged into darkness for long hours, negatively impacting business and dampening job creation prospects.

The announcement is a blow to the government of President Cyril Ramaphosa, who took office in 2018 promising to revive the country’s struggling economy.

Recently there have been some positive signs for the economy, which grew 3.1 per cent in the second quarter, avoiding a recession after a 3.1 per cent Q1 contraction. “The timing is particularly problematic and embarrassing for President Ramaphosa,” said political economy analyst Daniel Silke.

Silke said the news undermines Ramaphosa’s message as the president tries to spur international investment, having spoken at a Financial Times conference in London this week.

“We are also awaiting a rating agency review from Moody’s, the one agency that keeps us above a sub-investment grade,” Silke told AFP.

He linked the county’s decaying power infrastructure to the “state capture” scandal, which saw the systematic plunder of government coffers under Ramaphosa’s predecessor Jacob Zuma.

“We are seeing the after-effects of years of corruption and mismanagement,” Silke said.

Ramaphosa told the London conference that the state capture case was estimated to have cost the country more than 500 billion rand (USD34 billion).