Crises From Blackouts to Pandemic Cost South Africa $46 Billion

(Bloomberg) -- Six successive shocks over the past three years have cost South Africa’s economy as much as 850 billion rand ($46 billion), according to estimates from the department of trade and industry.

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Between early 2020 and the third quarter of last year the economy was upended by two global and four local crises that manifested in quick succession, Trade, Industry and Competition Minister Ebrahim Patel said. The cumulative output lost to the South African economy as a result is estimated at between 650 billion rand and 850 billion rand, he said at the release of his department’s Industrial Policy & Strategy Review report.

The shocks were listed as the global pandemic, the worst civil unrest since apartheid in July 2021, the war in Ukraine, severe flooding in the eastern coastal province of KwaZulu-Natal province in 2022, rolling blackouts, known locally as loadshedding, and logistics constraints.

The shocks came just as the economy was recovering from an era of endemic corruption known as state capture during President Jacob Zuma’s tenure, which targeted state-owned companies such as Eskom Holdings SOC Ltd. and Transnet SOC Ltd., according to the report.

The crises delayed and then shifted the focus of industrial policy, according to the report. Without them and assuming the country had simply matched growth trends seen in the decade prior to the pandemic, South Africa’s gross domestic product would have been between 3% and 5% larger in constant rand terms than it currently is, the report said.

The economic growth rate has averaged 0.5% since 2020.

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