Consequently the economy was not growing nearly fast enough to solve some of the country’s biggest challenges like rising unemployment.
This was according to Nicky Weimar, senior economist at Nedbank, who presented a broad economic outlook for South Africa at the Vinpro Information Day in Cape Town today (22 January).
Irregular and unreliable electricity supply was constraining South Africa’s GDP growth by up to 1%, she said.
In 2012 the growth rate slowed to 2,5% and then to 1,9% in 2013. But even in this environment of slow growth, 2014 was a particularly bad year, said Weimar. The GDP growth rate for 2014 was expected to be no more than 1,4%.
Protracted strikes in the mining sector as well as inadequate and power supply constraints plunged the SA economy into “low intensity chaos”, said Weimar.
The strikes and power supply constraints cost South Africa between 0,5 percentage point and 1 percentage point of economic growth.
“The longer we take to address the country’s limiting and aging economic infrastructure the more inhibiting it becomes to the economy,” said Weimar.
— Denene Erasmus (@agri_erasmus) January 22, 2015
“I’m hoping we will finally see a new power plant finished by 2016, but South Africa needs to see an enormous concerted effort from government to finish power plants,” she said.
Despite ongoing power supply woes, Weimar said GDP growth for 2015 was predicted to be around 2,5%.