Power and reform woes will slow South Africa’s growth

Significance

South Africa’s escalating power crisis has slashed its growth prospects, with the government making only slow progress on promised reforms and the president declaring a state of disaster over the issue.

Impacts

• The energy and economic crises may help ensure the ANC loses its majority in the 2024 polls, paving the way for messy coalition politics.
• The appointment of a new electricity minister could as easily aggravate as ease intra-ANC infighting over the crisis.
• The government may struggle to hire an experienced and competent replacement for outgoing Eskom CEO Andre de Ruyter.
• Private business and households’ investments in renewable energy may help boost growth and ease power supply woes somewhat.
• The commodities cycle downturn and risk of global recession also threaten near-term growth prospects, but the outlook is uncertain.