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Cape Town - The impact of the energy crisis in South Africa over the past six years has been so big that the country is no longer seen as the place to invest in Africa, according to economist Mike Schüssler of economists.co.za told Fin24.
"South African firms today invest nearly as much in Africa or elsewhere than in SA. There is simply no power for big investments."
He said in conjunction with strikes, load shedding, like that on Thursday, could cost economic growth of under 2% if it had to continue for more than a week.
"This situation is a disaster as platinum mines are also not taking electricity at the moment due to strikes," said Schüssler.
"These days power to big users is first cut by 10% first before blackouts start in residential areas. So, their cutbacks could be over 20%."
With mining, manufacturing and even transport impacted by the energy crisis, SA is increasing its risk of a recession.
"Small businesses were hit hard and in 2008/9 many closed when recession hit," said Schüssler.
Tarnished image
Prof. André Roux, director of the Institute for Future Research at Stellenbosch University, agrees with Schüssler that persistent power outages will serve to tarnish the image of the country as a reliable investment destination.
The result could have an impact on the inflow of much-need international investment to SA, Roux told Fin24.
The power cuts will inevitably have a negative impact on production in factories and the output of mines, he said.
"It will also reduce retail spending as shops and banks are forced to shut down for the duration of power outages."
He said ff this type of load shedding persists for a sustained period, the situation will be amplified.
"Moreover, persistent power outages will serve to tarnish the image of the country as a reliable investment destination, thereby possibly curing the inflow of much-need international investment.
"South African firms today invest nearly as much in Africa or elsewhere than in SA. There is simply no power for big investments."
He said in conjunction with strikes, load shedding, like that on Thursday, could cost economic growth of under 2% if it had to continue for more than a week.
"This situation is a disaster as platinum mines are also not taking electricity at the moment due to strikes," said Schüssler.
"These days power to big users is first cut by 10% first before blackouts start in residential areas. So, their cutbacks could be over 20%."
With mining, manufacturing and even transport impacted by the energy crisis, SA is increasing its risk of a recession.
"Small businesses were hit hard and in 2008/9 many closed when recession hit," said Schüssler.
Tarnished image
Prof. André Roux, director of the Institute for Future Research at Stellenbosch University, agrees with Schüssler that persistent power outages will serve to tarnish the image of the country as a reliable investment destination.
The result could have an impact on the inflow of much-need international investment to SA, Roux told Fin24.
The power cuts will inevitably have a negative impact on production in factories and the output of mines, he said.
"It will also reduce retail spending as shops and banks are forced to shut down for the duration of power outages."
He said ff this type of load shedding persists for a sustained period, the situation will be amplified.
"Moreover, persistent power outages will serve to tarnish the image of the country as a reliable investment destination, thereby possibly curing the inflow of much-need international investment.
