A large number of South Africans are emigrating from the country as they seek opportunities abroad, leaving behind a country mired in unemployment, endless political wrangling, and corruption that has hampered economic growth.
However, while the reintroduction of load shedding has not yet had a direct impact on emigration, according to experts, it does form part of a number of other factors which are pushing people to emigrate.
FNB property sector strategist, John Loos, said that there has been a steady increase in the number of South Africans who are selling their homes for emigration-related reasons – rising from 2% in 2013 to 10% at the end of 2018.
He noted, though, that the exact impact of load shedding on these figures could not be quantified.
“There has been so much other negative news in addition to the recent Eskom crisis that it all gets mixed up,” he said.
“Sentiment has deteriorated – but the gradual uptick in emigration-related selling points to a wider deterioration in sentiment.
“The Eskom issue is one key factor, because everyone knows that in a modern economy if you don’t reliable and affordable electricity you are going to struggle.”
Other factors such as the recently confirmed tariff hikes are also a consideration for South African homeowners, said Loos.
At the beginning of March, energy regulator Nersa said that it had granted Eskom the following tariff increases over the next three years:
- 9.41% or allowed revenue of R206.34 billion for 2019/2020;
- 8.10% or allowed revenue of R221.8 billion for 2020/2021;
- 5.83% or allowed revenue of R233.1 billion for 2021/2022.
The granted hikes equate to a 25.2% increase over the next three years.
“Since 2009, the CPI for electricity and other household fuels has well-exceeded overall CPI inflation almost all of the time bar a short period from mid-2017 to mid-2018,” said Loos.
“The latest tariff hike approval doesn’t appear to alter this tariff inflation sharply from where it was as at January, i.e. 7.63% (when overall CPI inflation was at 4%).
“However, the cumulative inflation rate in the Electricity CPI since the 1st quarter of 2008 (about the time where the Eskom Crisis first gathered steam), to the final quarter of 2018, just over a decade later, was a massive 274.45%.”
Loos said that load shedding had other impacts – notably in industry where there is a loss in production and a direct impact on GDP.
He added that load shedding was a ‘serious sentiment dampener’, impacting business confidence and investor confidence.