Load shedding was one of the biggest non-financial risks flagged yesterday by the South African Reserve Bank in its second Financial Stability Review.
The Financial Stability Review, which covers the period from May to November this year, is intended to create public awareness and stimulate debate around issues that affect the country’s financial stability.
Economists at FNB believe that economic growth will remain below 2% through to 2025 – with risks biased to the downside. Eskom shed 2,521 gigawatts of power over the last year. “A year of load shedding can run up to a horrific R7.5-billion every month, and R91-billion a year. The unquantifiable costs such as huge job losses, loss of confidence by investors and skilled emigration are wreaking long-term havoc on the economy,” he says.
“The second is the very unlikely event of a total grid blackout, which will have much more severe consequences – however, it is a tail risk and, ironically, load shedding is the mitigating factor against this,” she says. Kganyago added that over the short to medium term, the financial sector is vulnerable, from a reputational risk, perspective to steps that may be taken if the deficiencies identified by the Financial Action Task Force are not addressed quickly enough.
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