Load shedding to hit SA Q1 GDP growth – Goldman Sachs

Severe planned power cuts – termed load shedding – at South Africa’s state-run utility Eskom are expected to shave 0.3 percentage points off first-quarter GDP growth, Goldman Sachs said on Thursday.

The continent’s most industrialised economy has suffered from some of the worst power cuts in several years and a major challenge for President Cyril Ramaphosa two months before an election at which he will try to reverse a decline in voter support for the African National Congress (ANC).

“If the current intensity of load shedding were to persist in 2019, it could subtract up to 0.9 percentage points from annual growth,” Goldman analysts wrote in a note to clients.

Eskom supplies more than 90% of the power in South Africa but has suffered repeated faults at its coal-fired power stations, along with low water levels at hydroelectric plants and diesel shortages.