Energy News

South Africa’s Energy Crisis Deepens as Ministers Clash on Solutions

Published by
WIlliam Dube
  1. South Africa’s energy crisis is exacerbated by a lack of coherence among key ministers, leading to conflicting policy proposals and approaches to resolving the ongoing load shedding and power outages.
  2. The country’s push towards renewable energy, crucial for attracting international investment, is threatened by some ministers seeking to review and potentially renegotiate long-standing plans.
  3. Load shedding continues to negatively impact South Africa’s economy and sentiment, with the level of overall fixed investment falling significantly short of what is needed for faster real GDP growth.

As South Africa grapples with ongoing load shedding and the looming threat of even more severe power outages, the Bureau for Economic Research (BER) has highlighted an alarming lack of coherence among government ministers and policy proposals aimed at addressing the energy crisis. The situation was predicted by experts when the president introduced another minister into an already crowded field of authorities overseeing the energy sector and embattled power utility Eskom.

With the winter months fast approaching, South Africa is running out of time to implement effective solutions to the energy crisis. The country’s power utility, Eskom, struggles to consistently supply even 24,000MW of power. Instead of having a solid plan of action in place, key ministers are at odds over how to begin tackling the problem, while calling for significant policy shifts from long-standing plans.

The proverbial “too many cooks in the kitchen” seems to be playing out in South Africa, as the country now has three to five ministers who govern or have some say in the energy sector and Eskom. These include Mineral Resources and Energy Minister Gwede Mantashe, Public Enterprises Minister Pravin Gordhan, and Electricity Minister Kgosientsho Ramokgopa. Forestry, Fisheries and Environment Minister Barbara Creecy and National Treasury head Enoch Godongwana also wield significant influence.

The conflicting interests and positions of these key ministers have led to a lack of focus and a murky approach to resolving the crisis. For instance, while Ramokgopa has recently spoken of extending the lifespan of coal power stations as a possible solution to the energy crisis, the energy department simultaneously gazetted the next phase of renewable energy procurement under the Integrated Resource Plan for 2019 (IRP19). The latter calls for the rapid decommissioning of coal stations over the next few decades.

South Africa’s shift towards renewable energy has been a critical factor in attracting international investment, loans, and grants from developed countries, with billions of dollars already committed to the plan. However, this has not deterred some of the country’s ministers from seeking to review and potentially renegotiate these plans.

BER points out that the return of severe load shedding has coincided with key ministers responsible for resolving the power crisis not being “on the same page” regarding Eskom. “This incoherence is a predictable outcome of too many ministers being tasked with finding solutions for arguably South Africa’s biggest crisis,” the BER said.

In the meantime, load shedding continues to cast a shadow over South Africa’s economy and general sentiment towards the country. The energy situation dampened President Cyril Ramaphosa’s fifth investment conference, although it did demonstrate that the private sector is still seeking investment opportunities in the country despite numerous business constraints. Nevertheless, the level of overall fixed investment remains far below what is needed to achieve faster rates of real GDP growth.

The ratio of nominal gross fixed investment to nominal GDP rose only slightly, from 13.1% in 2021 to 14.1% in 2022, a far cry from the 30% target set by the National Development Plan (NDP) for 2030, according to the BER.

WIlliam Dube

William Dube is a finance and economic news expert with over 10 years of experience in economic anaylsis, financial product assessment and market analysis. With a numerous certificates from prestigious universities including but not limited to Yale University and the University of Pennyslivenia. William specializes in providing insightful news developments in South Africa and commentary on investment strategies, risk management, and global economic trends. You can contact him on william@rateweb.co.za

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Published by
WIlliam Dube

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