South Africa's Economy: At The Mercy Of Power Sector


Friday, March 06, 2020 / 03:00 PM / United Capital Research / Header Image Credit: ESI Africa


Recently, the South African Statistical body - Statistics South Africa (Stats SA) - published the country's GDP report for Q4-2019. According to the report, South Africa slipped into a technical recession during the quarter (second time in two years) as the seasonally adjusted and annualized real GDP contracted for the second successive quarter (Q42019: -1.4% q/q and Q3-2019: -0.8% q/q). Also, the FY-2019 real GDP growth moderated from +0.8% y/y in FY-2018 to +0.2% y/y.


Notably, of the ten industries measured by Stat SA, only the Finance (+2.3% y/y), Government (+1.7% y/y) and Personal services (+1.0% y/ y) industry, grew during the year. Also, a deep look into the broad components of the economy showed that the Primary (-0.4%), Secondary (-2.9%) and Tertiary (-1.0%) components of the economy contracted during the quarter.


In our opinion, we believe that the contraction in Q4-2019 and slower growth in FY-2019 continue to reflect the negative impact of the country's deteriorating power situation. Specifically, the inability of Eskom (South Africa's state-owned power utility company) to meet the national electricity demand had impaired business and consumer confidence. Hence, we believe that for the economy to rebound in 2020, deliberate actions must be taken to improve the current situation of power in the country.


Top African Stories

  • South Africa's Eskom to pursue Trillian liquidation to recoup funds: South Africa's power utility Eskom said on Thursday it will ask the North Gauteng High Court this month to liquidate consultancy firm Trillian in an attempt to recoup money owed to it.  Read more

  • Tanzania's 2019 economic growth estimated at close to 6% - IMF: Tanzania's economic growth in 2019 is estimated at close to 6%, the International Monetary Fund said on Thursday, driven by "buoyant" activity in the construction and mining sectors . Read more

  • Ivory Coast's President Rules Out Running for a Third Term: Ivory Coast President Alassane Ouattara said he won't seek re-election when his second five-year term ends later this year, ending months of speculation over whether he'll extend his rule . Read more

  • African airlines face $40 mln hit in 2020 from coronavirus: Coronavirus disruption could cost African airlines $40 million in revenue this year, a global industry body said on Wednesday, a potentially devastating hit to often struggling airlines counting on lucrative Chinese routes to fund expansion . Read more

  • South Africa confirms first case of coronavirus: South Africa on Thursday confirmed its first case of coronavirus, a man who had visited Italy, and the health minister warned it would test the country's health system. Read more


Looking Forward



Feb-2020 Net Reserves - March 15th




Feb-2020 Gross Reserves - March 16th



Jan-2020 Money Supply - March 12th


Mar-2020 Benchmark Interest Rate - March 19th



Mar-2020 Interest Rate - March 13th



Jan-2020 Money Supply - February 28th

Mar-2020 Interest Rate Announcement - March 12th


Feb-2020 CPI YoY - March 16th


Feb-2020 Money Supply - March 17th


Visit African Markets in Proshare MARKETS

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.


Related News

1.       ESMA Finds Continued High Risks As Financial Markets Remain Highly Volatile

2.      US Financials See Rising Risk from Cash Products Amid Libor Sunset

3.      African Countries and Eurobond Market: The Lovefest Continues in 2020?

4.      Global Ports Vulnerable to Coronavirus-Related Volume Declines

5.      Coronavirus May Add to Liquidity Strain for Some APAC Corporates

6.      AfCFTA 2020: The Real Deal?

7.      New Appointments To The UK Financial Conduct Authority Board Announced

8.     Coronavirus Set to Dampen China's Economic Growth

9.      What Coronavirus Means for Investors

10.  Coronavirus Raises Risks for China Toll Road Operators

11.   China Government Suspend Equity Market Trading to Prevent Sell-Off

12.  UK's EU Exit Does Not End Uncertainty

13.  Moody's Downgrades the Democratic Republic of Congo's Rating to Caa1

14.  Remarks By President Donald Tusk After The Euro Summit Meeting On 21 June 2019

15.  South Africa's Q1-19 GDP Result: On the Way to Another Recession?

16.  Togo Gets S and P's 'B and B' Rating: To Join The Eurobond Bandwagon?

17.   South Africa's Rand Continues To Tumble On Central Bank Worries

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Related News