Budget speech: Economists expect electricity crisis to be top of agenda

JOHANNESBURG - Finance Minister Enoch Godongwana will have to juggle competing national spending priorities and limited resources when he tables his budget speech in Cape Town this week.

Godongwana's highly anticipated address comes amid the country's tough economic times with high unemployment, struggling parastatals crippled businesses and frustrated residents due to load shedding.

Economists expect the country’s unstable electricity supply to be top of the agenda.

Since the onset of last year’s unprecedented energy crisis, load shedding has continued to escalate, with more than 200 days of power cuts in 2022.

Since the start of this year, the country has seen power cuts every single day.

This has seen the reserve bank revise the country's economic growth forecast for 2023 down to 0.3% from 1.1%.

Chief economist at Econometrix, Azar Jammine, has warned that failing to address the electricity shortages could further cripple the economy.

“National Treasury has indicated that intends providing subsidies to individuals and businesses to start investing more in solar energy."

In addition to aging infrastructure, poor generation capacity, corruption, and governance issues, the crisis at Eskom can also be attributed to its debt.

The power utility's debt and borrowing costs are at least R400 billion.

Efficient group economist, Dawie Roodt, believes Godongwana will announce measures to absorb some of Eskom’s debt.

“We know he's going to take over some of Eskom's debt but how much - that's the big question - and how is it going to be funded."