(3 minutes read)
· Power cuts are having their field day in South Africa
disrupting the production and keeping households in the thick envelope
of darkness. Economists fear that it may lead to a severe recession if
adequate and timely steps are not taken to stem the rot.
· The economy was up by just 0.2% in 2019 and in the previous
year by 0.8%, experts point out quoting official statistics. Seven out
of 10 of the country’s sectors registered negative growth in the
fourth quarter, including agriculture, which dropped by 7.6%,
manufacturing, which dropped 1.8%, and transport, which declined by
7.2%.
Power cuts are having their field day in South Africa disrupting the
production and keeping households in the thick envelope of darkness.
Economists fear that it may lead to a severe recession if adequate and
timely steps are not taken to stem the rot.
The South African economy was the leading economy of the continent
till a few years back. Now, the growth is dipped by 1.4% in the fourth
quarter of 2019. The previous two quarters also witnessed a negative
growth. A country enters the recessional trajectory, if two
succeeding quarters remain in the declining path.
Despite the talks and backroom maneuverings concomitant with the
appointment of the new CEO, the state-owned power utility, Eskom, did
not show much result and is unable to meet surging power demand. Now,
the power utility is implementing rotating cuts in electricity to
residences, factories, mines and businesses to meet the increased
demand.
\ Experts opine that Eskom’s inability to meet demand on a sustained
basis is a key reason for very slow growth record of just 0.9% a year
between 2015 and 2019. The economy was up by just 0.2% in 2019 and in
the previous year by 0.8%, experts point out quoting official
statistics. Seven out of 10 of the country’s sectors registered
negative growth in the fourth quarter, including agriculture, which
dropped by 7.6%, manufacturing, which dropped 1.8%, and transport,
which declined by 7.2%. That has pulled down the economic growth
forecast of the country in 2020 to 0.9%, which is inadequate to bail
out the economy from the morass that it has slipped into. The present
state of the economy also foretells the current regime’s inability to
take the country forward, despite its grand promises to that effect.
