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SA has lost well over a million jobs already due to load shedding – Schüssler

At least 350 000 potential jobs may be cost in 2021 – PwC.
A modern economy cannot be productive without a steady supply of electricity. Image: Carlos Becerra/Bloomberg

The ongoing power cuts in South Africa are expected to result in the shedding of at least 350 000 jobs, despite projections of 3.9% economic growth for 2021.

This is according to a research report by accounting firm PwC, which notes that the return of load shedding in the fourth quarter, after 11 weeks of no power cuts, undermines economic growth.

The report adds that although the global economic environment is favourable for trade-dependent South Africa, domestic challenges such as the ongoing power cuts continue to cloud scenarios for the remainder of the year.

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“Unexpected power station breakdowns, delays in returning to service some other units under maintenance, and the quicker than expected depletion of emergency systems resulted in nearly 15 000MW of capacity being out of action – that was nearly half of the power utility’s coal-powered fleet,” PwC said.

Economic hit

“Overall, we expect load shedding to reduce 2021 GDP [gross domestic product] growth by three percentage points and cost the country 350 000 in potential jobs.”

Chief economist at economists.co.za Mike Schüssler says South Africa has lost well over a million jobs already due to load shedding.

“Think of all the businesses that didn’t start up and businesses that have closed down, the mines that haven’t expanded because there’s no power, and the extra refinery that we were going to have in Coega that didn’t come,” he says.

“There [are also] thousands of small farms that didn’t make it and had to consolidate. That meant job losses.”

Schüssler adds that the service industry that probably uses the most electricity is the telecommunications sector – and if users can’t use their cellphone, then those service providers can’t make money.

“The mining and manufacturing guys are [also] in real dire straits when there’s no power. I will say that we might lose another few tens of thousands of other jobs in the next few months if we don’t get rid of load shedding. We already have close to 12 million people unemployed.”

Schüssler says the electricity issues have also had a negative impact when it comes to attracting investors, further injuring economic growth.

“Are you going to open a call centre in a country where your costs of opening one are going to be higher because you are going to need generators and [power] backup a lot more than in other countries? You have to think of that.

“This is not even about how cheap or how expensive your labour is. You cannot be productive in a modern economy if there’s no electricity,” says Schüssler.

“Our electricity prices are all of a sudden sky-rocketing, making the cost of doing business [or running] a factory or a mine in South Africa a lot more expensive.”

He adds that it is “quite clear” that the country has lost millions of jobs and “trillions of rands over these 14 years” because of the electricity situation.

Palesa Mofokeng is a Moneyweb intern.

Listen: PwC economist Dr Christie Viljoen discusses SA potentially losing up to 350 000 jobs due to load shedding

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There is also a silver lining, as thousands of jobs have been created to deal with loadshedding.

The generator and inverter industry is flourishing and creating jobs.

The solar and gas industries have created many jobs.

And companies that are pursuing private power generation, are also a source of job creation.

Sometimes there is good in the bad. The loss of jobs is balanced out by the creation of new jobs.

Such wonderful logic! Wotta laff! You could get a job writing for Private Eye.

Like saying we’re going to hang more people so there’s going to be BIG growth in the rope making and scaffold carpentry business! And when we can’t find more people to hang, well, those rope makers and carpenters will be expertly qualified to build global businesses!

Regarding the good and the bad, you forgot ugly … I will leave readers to decide who in your political party fits that bill.

Jirre Effie, what a wonderful, heart-warming success story! Break out the Johnny Blue and cue rhythmic dancing to awuleth’ umshini’wam.

The one to blame is Gwede Mantashe, the Minister of Energy and Mining and National Chairperson of the African National Congress. He is also a former chairperson of the South African Communist Party and Secretary General of the ANC.

Absolutely No Conscience is smiling all the way to the bank. Since when did they ever care about jobs for the electorate? (Other than pay lip service)

On the other hand, the very same gullible electorate who are losing jobs in their droves still do not change their voting habits, but are seemingly happy with the T shirts that were recently received.

On the ‘see through’ principle, the loss of jobs is due to the ANC.

End of comments.

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