South Africa's rotational blackouts are placing the country's prospects of economic recovery under severe pressure and weighing heavily on businesses, the South African Chamber of Commerce and Industry (SACCI) has said. Photo: Armand Hough/African News Agency (ANA)

DURBAN – South Africa's rotational blackouts are placing the country's prospects of economic recovery under severe pressure and weighing heavily on businesses, the South African Chamber of Commerce and Industry (SACCI) has said. 

"We have received many complaints from businesses in the retail and other manufacturing sectors not being able to fulfil production schedules on sales orders during this critical period. The government’s promised plans in revitalising the economy by building infrastructure and driving policies for industrialisation will now come into question, as energy is the biggest enabler for any of these plans to come to fruition," said SACCI chief executive Alan Mukoki on Tuesday.

Power utility Eskom took the unprecedented step of moving the country to stage 6 rolling blackouts - known as loadshedding – with scant warning on Monday, following a period of Stage 2 and 4 blackouts.

The load shedding had a negative effect on job creation and growth, said Mukoki.

"The current challenges are weighing heavily in the business cycle. This has also caused some mines to shut down operations. Some of the telecoms companies have reportedly had their revenues put under extreme pressure due to lack of connectivity as a result of lack of power in the telecoms towers."

Mukoki said the ability to "make a dent" in unemployment and stop the economy from entering recession would now become "a mammoth task".

"Eskom remains the biggest risk facing the economy. We remain pessimistic about the outlook for a positive assessment by credit ratings agencies. This could further spell doom for our economy as a down-grade to junk status takes many years to reverse."

Mukoki said SACCI urged government to take drastic steps to get on top of the energy situation. 

"The restructuring and solutions relating to Eskom should start with the governance of the SOE itself.

"In this regard, the time has come for the government to re-evaluate its own role and capability on whether it has the necessary competencies, skills and experience to manage an organisation of Eskom’s complexity. 

"As SACCI, we remain convinced that the appointment of non-executive directors to SOE boards should be handled by an independent structure that can be fashioned to be similar to the Judicial Services Commission (JSC)."  

It was critical that government examined its own complicity in the destruction of value, lack of service delivery and the wastage that had bedevilled the SOE sector, he said, adding that business had yet to be advised of the progress made with the nine point plan Eskom committed to in November 2018.  

"Business had planned around those commitments and we are uncertain about the implementation and progress made with that plan.

 "We are also unclear about the various governance structures that the shareholder has tended to put around Eskom, namely, inter ministerial cabinet committees, transformation committees, various consultants, the board, national treasury etc. This contributes to lack of transparency around accountability. This is why we believe the restructuring of SOEs cannot exclude the evaluation of the role of the shareholder in the governance of the SOEs."

African News Agency (ANA)