Concerns about the security of electricity supply, after Eskom announced a further delay in the commissioning of its Medupi power station, presented another threat to South Africa’s growth forecast as it worsened investor perception, economists said yesterday.
Nicky Weimar, the senior economist at Nedbank, described the shortage of electricity and the “dramatic increase” in the cost over the past few years as “a binding constraint” on the economy.
“Without certainty of supply, businesses can’t plan, can’t invest and the economy can’t grow at more than 3 percent,” Weimar said.
Economists.co.za chief economist Mike Schussler said the uncertainty in power supply had carried on for a long time.
“We are unlikely to see any major new mining operation, any smelter or manufacturing plant. And it’s not only about the international investor. If we want to put together another Iscor, another PetroSA or Sasol, we won’t be able to.” Continue reading