ESKOM’s electricity crisis has “very severe” implications for growth prospects for South Africa, according to the World Bank. The “power shortage in South Africa is of great concern,” Francisco Ferreira, the World Bank’s chief economist for Africa, told reporters via video-link from Washington yesterday. The lender is monitoring the situation closely, he said. ESKOM’s load shedding programme will probably restrict growth in gross domestic product (GDP) to 2% this year, according to the World Bank, in line with the government’s forecasts.
“We hope bringing in the power plants into the grid will bring about some relief,” he said. “There is a need for better management of ESKOM’s assets going forward.” South Africa’s economy expanded 1.5% last year, the slowest pace since the 2009 recession.Dawie Roodt, chief economist of Efficient Group in Pretoria, estimated that the electricity crunch since 2007 has cost the economy more than ZAR 300bn in lost output.
Sluggish growth in South Africa and a slump in commodity prices will restrict GDP expansion in Sub-Saharan Africa to 4% this year from 4.5% in 2014, the World Bank said.