Economic Opportunities

The energy crisis is costing us jobs, restricting economic growth and affecting the country’s position as a business destination.

Power outages cost the Western Cape up to R2billion per month.

Energy expert Chris Yelland found that the cost of the forced blackouts during Stage 1 load shedding is R20 billion. This is for 10 hours of blackouts for 20 days per month.

If the same parameters are used, then Stage 2 load shedding costs the economy R40 billion per month, while stage 3 is estimated to cost SA R80 billion per month.

The Western Cape GDP contributes 13.8% to the national economy which translates into the R2 billion loss for the province’s economy.

Public Enterprises Minister Lynne Brown has corroborated these figures, admitting that power outages cost the economy up to R89 billion each month.

The blackouts and the constrained power supply have also impacted the national growth rates.

The International Monetary Fund revised its projections for economic growth in South Africa in 2015 by 0.2% to 2.1%.

Bureau for Economic Research (BER) senior economist Hugo Pienaar stated that the outages would result in 1.9% growth forecast for GDP growth, down from the previous 2.9%

An economist from the Free Market Foundation estimates  that the power cuts will shave off 0.4% of GDP growth this year.

These revisions have a direct impact on the country’s ability to create jobs.[1]

While the Western Cape economy has outperformed the national growth rate by 0.2 percentage points over the last two years, it may be assumed that the impact on the provincial economy will be similar to that on the national economy.

This means lowering the province’s expected growth rate by between 0.2 and 0.4% in the current cycle