South Africa\u2019s municipalities owed state power utility Eskom R56.3 billion by the end of last year, a debt that\u2019s continued to rise, Deputy President Paul Mashatile said.<\/p>\n
\u201cIt is clear that we need a debt relief strategy that will acknowledge the inherent risk of unviable municipalities,\u201d he told lawmakers in Cape Town on Thursday.<\/p>\n
\u201cEskom will provide incentivized relief to municipalities whose debt is unaffordable. However, the relief will come with conditions that will ensure there is no repeat of debt buildup over time.\u201d<\/p>\n
Municipalities will be required to install additional prepaid electricity meters and use their budgetary allocations more effectively and efficiently to qualify for assistance, according to the deputy president.<\/p>\n
Blackouts have reduced the potential size of South Africa\u2019s economy by almost a fifth since they started being imposed around 2008, according to Lungile Mashele, sector specialist for energy and infrastructure at the Public Investment Corp., Africa\u2019s biggest fund manager.<\/p>\n
Outages can be expected every week this year and if the inadequate electricity generation situation isn\u2019t addressed, the prospects for economic growth will be dismal, she told a conference in Johannesburg.<\/p>\n
Consumer confidence plunged in the first quarter as intense power outages hamstrung economic activity and stoked food-price inflation.<\/p>\n
A quarterly index measuring sentiment fell to -23 in the three months through March from -8 in the previous quarter, FirstRand Ltd.\u2019s First National Bank said.<\/p>\n
That\u2019s the lowest level since the second quarter of 2022, when deadly floods wrought havoc in the eastern KwaZulu-Natal province and the impact of the war in Ukraine started to manifest.<\/p>\n
The International Monetary Fund urged South Africa to implement reforms to boost private-sector investment, promote good governance and improve the efficiency of public spending to shore up the energy-starved economy.<\/p>\n
The rolling blackouts, known locally as load shedding, coupled with softer commodity prices mean Africa\u2019s most industrialized economy will probably only grow 0.1% in 2023, the Washington-based lender said Wednesday after a staff visit to South Africa.<\/p>\n
That compares with its January estimate of 1.2% and the National Treasury\u2019s projection of 0.9%.<\/p>\n