Lights out for almost 1.5 million jobs in South Africa

Electricity Minister Kgosientsho Ramokgopa recently revealed that the job losses in 2022 and those that are expected to be lost in 2023 due to load shedding equates to almost 1.5 million.

The Minister addressed Eskom employees at Medupi Power Station, which has experienced multiple breakdowns leading to frequent load-shedding. “When Medupi coughs, the country catches a cold,” Ramokgopa said. “You coughed last week, and as you coughed, you removed two units, and as a result of that, we experienced intensified levels of load-shedding.”

The Minister explained that Medupi “stands between people’s livelihoods and prosperity” and emphasised the impact of breakdowns and subsequent load-shedding on the South African economy.

Ramokgopa said 640,000 people lost their jobs due to elevated load-shedding in 2022, and the amount of jobs that have been lost as a result of load shedding in 2023 is projected to be upwards of 800,000.

“At the current rate that we are going, where we have had the most days of load-shedding in 2023, we will most likely lose 840,000 jobs if you were to go by the modelling that has been done by some of the reputable institutions,” he said.

This means 1.48 million jobs have likely been extinguished by rampant power cuts in South Africa over the past 24 months.

Additionally, during load shedding, 64% of small township businesses cease operations and almost 66% of business owners have cut jobs, according to the Nedbank Insights Report conducted in partnership with the Township Entrepreneurs Alliance (TEA).

According to The Outlier, South Africa has already faced 6,776 hours of load-shedding in 2023, and 326 days of load-shedding have been recorded so far. This implies that, as of 6th December, there have been only 12 days without load-shedding this year, which is a matter of grave concern.

The Minister has previously warned about job losses when he estimated the impact of power cuts on gross value added to the economy would be approximately R725 billion. 

The Minister also emphasised that Eskom’s inability to meet electricity demand reliably is not only a significant problem for the economy but also detrimental to the government’s ability to help the poor.

The impact of load-shedding on job losses has already been witnessed in South Africa’s mining industry this year. In this year’s trading updates, mining companies and their CEOs have been vocal about the worsening operational conditions that have hindered their investment in South Africa.

Daily Investor reported that Exxaro’s coal production decreased by 11% in 2022 “due to the poor rail performance from Transnet” and the “structural constraint of inadequate electricity supply”. Sasol attributed its declining output to South Africa’s deteriorating infrastructure and the “structural constraint” of load-shedding.

“Persistent load-shedding, infrastructure constraints, in particular, the poor performance of the national provider of rail and port logistics services continue to significantly impact our business,” it said.

Sibanye-Stillwater said the “increasingly supportive environment in Europe is in stark contrast to the operating environment in South Africa, which has continued to regress”.

In an operating update earlier this year, Sibanye said South Africa’s operating environment for miners is regressing due to ongoing load-shedding, the deteriorating quality of public services, and increased organised crime.

These challenges have led many local miners to reduce costs by cutting jobs, specifically in their South African operations. Sibanye recently announced restructuring efforts that could impact over 4,000 South African jobs.

The National Union of Mineworkers (NUM) has issued a warning that approximately 10,000 jobs may be lost between now and January 2024, as mining companies have started to send out retrenchment notices due to the decline in commodity prices and the inability to export their products.

“Most companies have cited load-shedding and the continued increasing prices of electricity as reasons to issue Section 189A notices,” NUM said in a statement.

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