Rolling power blackouts hurt South African consumers and business

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South Africa is implementing a new round of rolling blackouts because of power shortages, leaving homes and businesses without electricity for more than nine hours a day and risking long-term economic harm to the country.

The country has faced severe energy shortages since 2008, and the state power utility, Eskom, has frequently had to cut power supplies to its customers.

The situation has been exacerbated this year because of industrial disputes between Eskom and trade unions representing its workers.

The new round of rolling blackouts started on Monday afternoon with load shedding, leaving many homes and businesses without power for more than nine hours a day. While the short-term impacts of the power cuts are causing strife for South Africans in their day-to-day lives, the long-term impacts will weigh heavily on the country’s economy, according to analysts.

“To the impact that it [blackout] is having on the South African economy, obviously it is a massive inconvenience to millions of people. But more than this, it does very significant economic damage at every level, from small business through to commerce, industry, agriculture, mining and transportation,” Chris Yelland, Managing Director at EE Business Intelligence, a business consultancy that specialises in the energy sector, said.

“Every sector of the economy is affected by electricity shortages - the economy is unable to grow because of the constraints of the electricity supply,” he stressed.

Business analysts say that South Africa’s fragile economy is facing the risk of recession and credit rating downgrades if the energy crisis continues.