South Africa’s Electricity Crisis – It will only get worse!
Domestic service delivery has been one of the most heated discussions in South Africa’s democratic history, of which Eskom has been top of the list.
Eskom, the State-Owned Enterprise who is already slowly but surely drowning in debt, unable to expand their operations to meet the demands form a growing population and a growing economy but worse than that, they are not able to service their equipment and their machinery.
Bearing in mind that there are no available funds for the expansion of their operations, the current load is being divided between their current infrastructure which inevitably will be overloaded at some stage which then in turn leads to periods of complete blackouts where no business is able to operate, no retail end user able to make use of most of their household appliances and at the end of the day, paying consumers being ripped off.
The future is not looking bright, at all!
Apart from current infrastructure being overloaded, we are seeing a number of people tapping in to gridlines in order to gain free and illegal access to electricity. The lack of enforcement over time has led to paying end users carrying the burden of increased electricity costs and businesses losing out on economic opportunities as it is just not possible nor feasible to run every other business on a small petrol generator, leading to complete blackout until Eskom is back up and running.
Given that our economy is sitting at record high levels of unemployment, record high levels of debt to GDP and record high levels of uneducated youth, the future is not looking bright at all! The constant supply of electricity is non-negotiable, it should be the government’s main priority to address this issue, not what to wear to the next election campaign!
The country has been bleeding for years and if there’s no immediate action taken then very soon there will be nothing left to bleed. Economic opportunities are rapidly decreasing within South Africa and it is time to start addressing the issues.
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Caveat Capital Management is a strategic advisory firm based in Cape Town. Caveat Capital Management specializes in structuring tailor-made investment portfolios that serve your needs now and grow with you as your needs change. Caveat works to maximize your gains and minimize the risk.
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Caveat Capital Management has a competitive fee structure that incentivizes the portfolio manager to perform and the remuneration is highly linked to the performance of the portfolio. Caveat Capital MGMT (Pty) Ltd is a CATII – Authorized Financial Services Provider (FSP no. 24777) registered at the South African Financial Services Conduct Authority (FSCA). Meaning that we have the required licensing to structure full-discretionary portfolios structured to your needs.
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Caveat Capital MGMT (Pty) Ltd is a CATII – Authorized Financial Services Provider (FSP no. 24777) registered at the South African Financial Services Conduct Authority (FSCA).