South Africa faces more power cuts, raising Ramaphosa reform risk

South Africa faces more power cuts, raising Ramaphosa reform risk <> *Photo by* Creamer Media
South Africa <> faces more power <> cuts, electricity utility <> Eskom <> warned on Monday as it sought to prevent the collapse of its power <> grid in a test for President *Cyril Ramaphosa <>*’s reforms.
Eskom <> implemented a fifth day of controlled power <> cuts on Monday, putting more strain on an economy already mired in recession only months before a national election. ADVERTISEMENT <>
“The entire week could be severely constrained if we are unable to replenish the diesel <> and water <> reserves, and reduce the high unplanned outages,” Eskom <> spokesperson *Khulu Phasiwe <>* said.
Eskom <>, which is battling a severe financial <> crisis, coal <>shortages and breakdowns of its power <> plants, said it would cut up to 2 000 megawatts of power <> from the grid on Monday. ADVERTISEMENT <>
The utility, which last week called for a bailout or debt relief, began the controlled cuts, known as load-shedding, on Thursday as demand for power <> outstripped available capacity.
“Eskom <> teams are working hard to salvage the situation but the process is going to be hard, long and costly,” Phasiwe said.
Ramaphosa has made reforming Eskom <> a priority, but he has been hampered by fiscal constraints in a blow to his plan to woo investors who can help grow the economy ahead of an election likely to be held in May next year.
“Eskom <> as an institution and its ability to provide stable power <> supply is the single biggest risk to Cyril Ramaphosa <>’s investment drive and the South Africa <> fiscus,” *Isaah Mhlanga <>*, executive chief economist at Alexander Forbes Investments said on Twitter.
BNP Paribas South Africa <> senior economist *Jeff Schultz <>*said prolonged power <> cuts would likely hurt economic growth in the first quarter of 2019, although a slowdown in manufacturing <> over the Christmas <> period will buy Eskom <>some time.
“But come mid-January, if we are still facing load-shedding, that is when it is going to be a much more pressing issue for the economy,” Schultz said.
South Africa <> entered recession in the second quarter for the first time since 2009. Third-quarter gross domestic product <>numbers are due out on Tuesday, with analysts polled by Reuters predicting quarter-on-quarter GDP growth of 1.6 percent.

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