South Africa heading for a deep recession - Tito Mboweni

On Thursday former Reserve Bank Governor Tito Mboweni warned that South Africa is heading for a deep recession, if we don’t sort out our electricity supply constraints.

“Our economy is growing slowly and only because consumers are still shopping and, for now, they still have jobs,” says Chief Economist at Stanlib Asset Management Kevin Lings. “Fixed investment, however, is already in recession and it’ll get worse due to the lack of electricity.”

Will electricity outages cause a new round of job losses?

Lings says that a lot of small businesses, especially, are struggling under current circumstances. “If they start going under, or start scaling back, we’ll go into recession.

“A couple of weeks or months from now, if this uncertainty persists, companies will start cutting back.”

How to avoid our economy form grinding to a halt

Lings agrees that we should bite the bullet and accept daily load shedding – even in times of low demand – so the necessary maintenance can take place.

“But we must be certain about when when there’ll be outages. We must get assurances that maintenance is actually taking place and that it’s done well, and in the time that the schedule suggests.

“We need leadership,” says Lings. “We need certainty and we need a lot more openness regarding the true state of existing electricity production in South Africa. We need a plan to work to and we need honesty as to how long we’ll have to endure this."

Listen to the audio for more detail.


This article first appeared on 702 : South Africa heading for a deep recession - Tito Mboweni


Recommended

by NEWSROOM AI
Read More
South Africa can have cheap electricity, forever! – former Eskom engineer

South Africa can have cheap electricity, forever! – former Eskom engineer

The Money Show’s Bruce Whitfield interviews Dr Tobias Bischof-Niemz, CEO at ENERTRAG South Africa.

'Drop shipping' - the shady side of connecting buyers with sellers on the web

'Drop shipping' - the shady side of connecting buyers with sellers on the web

The web was supposed to connect buyers to sellers, but not like this.

Meet Sandile Shabalala, CEO of black-owned and controlled TymeBank

Meet Sandile Shabalala, CEO of black-owned and controlled TymeBank

TymeBank has no branches and no monthly fees. Most transactions are free. Bruce Whitfield interviews its CEO.

Buying a used car? New app sends mechanic to inspect it before you decide

Buying a used car? New app sends mechanic to inspect it before you decide

Hanru Reyneke is on a mission to disrupt the used-car industry in South Africa by providing peace of mind to punchdrunk consumers.

How to get off the Eskom grid

How to get off the Eskom grid

Homes and businesses… Grahame Cruickshanks (Green Building Council SA) offers advice on freeing yourself from Eskom.

South African economy ekes out 1.4 percent growth

South African economy ekes out 1.4 percent growth

South Africa’s Gross Domestic Product (GDP) grew by 1.4 percent (annualised) in the third quarter of 2014.

Popular articles
Eskom: WhatsApp message about Thursday 'blackout' is fake news

Eskom: WhatsApp message about Thursday 'blackout' is fake news

Eskom's head of generation, Andrew Etzinger, says the WhatsApp message doing the rounds about a blackout is misinformation.

What are the rules and regulations when it comes to owning a generator?

What are the rules and regulations when it comes to owning a generator?

A listener on the Afternoon Drive has shared his frustrations with a neighbor's noisy generator and the health risks it posed.

Eskom and authorities have to plan for worst case scenario, says energy expert

Eskom and authorities have to plan for worst case scenario, says energy expert

Analyst Chris Yelland says South Africans should be comforted and not alarmed by the fact that Eskom has made contingency plans.

Distraught caller describes harrowing experience on Baden Powell Drive

Distraught caller describes harrowing experience on Baden Powell Drive

A CapeTalk caller explained to Lester Kiewit how he went through flames and over rocks, and debris to escape his car being stoned.

What's next with Jacob Zuma's corruption charges trial?

What's next with Jacob Zuma's corruption charges trial?

Investigative journalist, Karyn Maughan, reflects on a year since charges against former President Jacob Zuma were reinstated.

Kilometres of boiler tube leaks 'are biting us big time' says Eskom COO

Kilometres of boiler tube leaks 'are biting us big time' says Eskom COO

Eskom's Jan Oberholzer says it has discovered boiler tube leaks which continue for kilometres and is working to repair this.

Here's how to check your load shedding schedule in Cape Town

Here's how to check your load shedding schedule in Cape Town

Eskom has warned that more power cuts can be expected as maintenance continues over the next twelve months.