TIPS Development Dialogues 2023
Loadshedding and the implications for Industrial policy - How to make the economy more resilient

Monday 24 April 2023

PRESENTATIONS AND PAPERS

Presentation: Metals and Engineering Sector Load Shedding Impact Assessment - Tafadzwa Chibanguza, SEIFSA 

Paper: SEIFSA Load Shedding Impact Assessment on the Metals and Engineering Sector

Presentation: Impact of loadshedding on municipal finances and services survey - Dr Silas Mulaudzi, Salga 

Presentation: Loadshedding and industrial policy - Dr Neva Makgetla, TIPS

MEDIA

Media article: Loadshedding hindering industrialisation - Tasneem Bulbulia, Engineering News

Media article: Consider competing interests in transition to green energy, experts urge - Michelle Gumede, Business Day

Background

The energy emergency has placed immense pressure on energy systems, including the national grid, to exacerbate an already fragile South African economy. while further breaking the trust in the national government. The consequences therefore increase the fiscal pressure on all sectors of business but more especially small businesses which have been left more vulnerable. While South Africa has a vibrant small business sector, more work needs to be done to empirically understand the impact of loadshedding on enterprises. From limited research it has shown that small business owners have had to work longer hours, work different hours, lose potential sales, or produce less of their products. These all impact on profitability and the viability of firms.

The cumulative impact across the economy has an overall negative outcome for economic growth and job creation. The concern is that the loadshedding has held back much needed economic growth and stronger recovery as we move out of COVID. The fragility of the grid means Eskom is just not meeting the needs of the economy and requires that firms find mitigation strategies and alternatives. More needs to be done – landlords, municipalities, and industrial sites should all be looking at long-term solutions to move off the grid and supply as much of their own electricity as possible through renewable energy. The available evidence shows that it is cost effective to do so and TIPS is doing further research to confirm that. There are increasingly also finance options and companies that are offering renewable solutions. The challenge is also for bigger enterprises or high-energy consumers who are also exploring alternatives to cope with the current situation.

This Development Dialogue will unpack how industrial policy can assist all businesses to stay resilient. It will explore the real cost of electricity and diesel, how the communities on the ground are impacted, alternative solutions to working off the grid, rolling out solar energy and other renewable energy sources, and how the different sectors can build for resilience in spite of the Eskom reality.

Agenda

Opening and welcome by chairperson: Saul Levin

Presentations and discussion:       

Tafadzwa Chibanguza: SEIFSA - Load Shedding Impact Assessment on the Metals and Engineering Sector

Dr Silas Mulaudzi: Salga - Impact of loadshedding on municipal finances and services survey

Dr Neva Makgetla: The economy and the energy emergency

Discussion and Closure

About the Speakers

Neva Makgetla is a senior economist at TIPS. Makgetla has published widely on the South African economy and worked for many years in government.

Tafadzwa Chibanguza is Chief Operating Officer at SEIFSA. Previously, he worked as an Economist at the Minerals Council South Africa, as a Senior Economist at SEIFSA and a Technical Wealth and Investment Analyst at Rand Merchant Bank. In the mining and metal sectors his broad focus areas include formulation of mineral, industrial policy, and micro/macro-economic impact assessment modelling.

 Dr Silas Mulaudzi is a Specialist at SALGA responsible for Sustainable Energy. He has more than 15 years’ work experience in the energy sector at a local and national government. He has previously worked for the Department of Energy as a Deputy Director responsible for Grid-Connected Renewable Energy and City of Tshwane Metropolitan Municipality as a Deputy Director responsible for Energy and Environment. 

Neva Makgetla is a senior economist at TIPS. Makgetla has published widely on the South African economy and worked for many years in government.

The Development Dialogue brings together academics, policymakers, civil society organisations, workers and practitioners to discuss these issues and share ideas on the way forward.

TIPS is partnering with the Department of Trade, Industry and Competition (the dtic).

For more information, please contact TIPS via email to: buhle@tips.org.za

About the Development Dialogue Seminar Series

The objective of the seminar series is to provide a platform to share views and ideas on development and policy issues. These seminars are geared towards individuals that are involved the policy development process. To access the presentations of seminars which have already taken place, visit the TIPS website Dialogue section. This Development Dialogue will be held in a hybrid format allowing for both in-person and virtual participation.