“The deep concern expressed by President Cyril Ramaphosa at the economic and business implications of the shock decision by Eskom to escalate load-shedding to level 4 must be widely supported. Early solutions are required if the positive message of the SONA last week to put SA on new and higher growth path is not to be undermined.” This is according to NWU Business School economist, Professor Raymond Parsons.
Investment, jobs, consumer spending, Budget projections – all the main drivers of higher economic growth in SA are in jeopardy if the latest crisis and uncertainty around Eskom’s ability to supply power are not resolved as soon as possible, Professor Parsons adds.
He believes that the government and the private sector need to urgently see what emergency and supplementary steps may be possible to minimize the negative impact on the economy.
“The modest 2019 consensus growth forecast of about 1.4% for SA may well have to be reduced further if the Eskom situation is not stabilized soon. The credit rating agency Moody’s now sees Eskom as the biggest single risk to the SA economy.”
Professor Parsons states that what now remains of overwhelming importance to business and investor confidence is security of power supply, if SA is to meet its growth and employment targets.