While SA has declared the "unprecedented" power outages a national emergency, public enterprises minister Alec Erwin says the country's economic growth can be sustained. However, economists and ICT commentators say the economy will suffer due to the situation.
Erwin this morning apologised to the nation for the "unprecedented and unplanned" power outages and called the situation a national emergency.
He says government had to take some of the blame for the situation, as has also been conceded by president Thabo Mbeki.
Erwin stressed energy savings as a means to address the situation in the short- to medium-term, saying "the growth of SA's economy at the current healthy levels can continue if we change our behaviour and become more energy-efficient".
"Government is very confident that we can do this and the response we have had from organised business and large users makes it clear that all stakeholders are committed to co-operating in this emergency campaign," he says.
Huge impact
However, economic industry experts are not as optimistic as Erwin. Africa Analysis partner Dobek Pater, Whiphold Treasury's economic analyst Craig Zaiman and Computer Society of SA executive director Tony Parry say the power outrages will have a huge impact on SA's economic growth trajectory.
As a key player in the national economy, the ICT sector will also be impacted by the power outages as investors could look to take their money elsewhere, they say.
"Investors will think twice about coming to SA. Local companies may also look to invest in other places or even to relocate," Pater says.
Short- to medium-term spending in the IT sector will also feel the impact of the outages as businesses have to spend on power generation and retention-technologies, he adds.
Parry says the impact on larger corporations could be offset by the disaster management protocols they have put in place to fulfil good governance requirements.
"Larger corporations generally have things like UPSes and generators," he explains. "It is the smaller players that are being pushed to spend on these things and don't necessarily have the resources to go out and buy, such as laptops and 3G cards."
Parry acknowledges that larger corporations will be affected by the frequency of power outages. "Disaster recovery plans did not necessarily take into account repeated power outages on a daily basis."
The real losers in the current power situation are small business owners, he says. The constant power cuts are also affecting ICT users in a major way.
Looking for solutions
Parry says SA needs a focused approach to the energy problem and should not simply accept it. "We need a combined approach that is focused and cuts across industries and at the very least looks to alleviate the disruptions."
In addition, the communication of power outages needs to be improved as part of a comprehensive electricity action plan, he says.
"The heart of the current problem is that outages are not communicated on a planned, sustained basis. If South Africans knew roughly when Eskom was going to cut power in their areas, they could plan around it," says Econometrix economist Tony Twine.
Zaiman says government should draw the private sector into looking for alternative sources of energy. "The private sector should be given incentives to run with the issue."
Increasing interest rates are also not helping the situation, he says. We are only now beginning to see the first two rate hikes' impact on the economy. The effect of the other 3% has yet to be felt, he says.
"You cannot fight an energy crisis by using interest hikes. Government has to find other solutions."
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