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South Africa’s unstable power will affect growth prospects

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South Africa’s economic growth would experience sluggishness as Eskom plans to continue with blackouts particularly for the next five years, said economists.

“Clearly the growth will be subdued than we would have expected,” said Jannie Rossouw, head of the School of Economic and Business Sciences at the University of the Witwatersrand.

Eskom CEO Andre de Ruyter said on Monday that South Africans should brace themselves for more load-shedding over the next five years, citing ageing power plants which urgently required maintenance as some of the contributing factors.

This announcement came after President Cyril Ramaphosa late last year said his administration wanted to boost the economic growth this year after a 7 percent slump in 2020.

Dawie Roodt, chief Economist of the Efficient Group, said issues of unstable power wouldn’t be good for the economy.

“It’s bad for economic recovery,” he told Xinhua.

Currently, Eskom is the only electricity supplier in the country but Roodt said private companies should be allowed to supply electricity in an effort to deal with the shortfall.

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Both experts said they expected businesses to commence generating their own power as soon as regulations were amended.

“Throughout these five years, businesses and some people would take themselves off the national grid,” Rossouw said.

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