South Africa kissed R2.8 trillion goodbye

In 2023, at the height of load shedding, South Africa lost an estimated R2.8 trillion due to the unreliable energy supply.

This was revealed by Eskom chief executive, Dan Marokane, during a discussion at the Unisa Graduate School of Business Leadership.

Marokane was joined by Minister of Electricity and Energy, Kgosientsho Ramokgopa, and Eskom chairman, Mteto Nyati.

They touched on numerous issues at Eskom, including the importance of leadership and aligning the interests of the shareholders, board, and management.

“These are not only Eskom lessons. They speak to any leader, board or organisation serious about transformation in South Africa,” said Nyati.

As part of the conversation, Marokane was asked about the impact of load shedding on South Africa and the economy.

He cited a study by the Council for Scientific and Industrial Research (CSIR), which calculated the economic impact.

“The height of load shedding, when we were experiencing the most regular and intense load shedding, with Stage 6 occurring frequently, happened in 2023,” he said.

“The CSIR estimated that the cost to the country in that single year was approximately R2.8 trillion.”

“That is what we lost as a nation from a competitiveness standpoint. It represents a major retardation of GDP growth.”

He said this led some companies to disinvest and others to shut down completely, which led to a drop in corporate earnings.

The 2023 financial reports of many companies stated that they underperformed due to electricity unavailability.

Many of them used alternative supplies of electricity, typically diesel, which ate directly into their bottom lines.

“Furthermore, in townships, small and medium enterprises lost significant economic activity. It was a true calamity across the country at its peak,” Marokane said.

The good news is that the situation has changed significantly since 2023, when Eskom could not meet electricity demand for 91% of the time.

“Eskom’s Generation Recovery Plan became more entrenched and effectively executed, and we saw our capacity recover to 95% to 100%,” he said.

“This shift translates directly into renewed confidence in the economy. You are beginning to see the results now.”

He said there was a stark contrast between Eskom’s 2023 financial year results and those for the current year.

“That demonstrates the critical importance of Eskom to the broader South African economy,” he said.