Blackouts are not only about lights that are not working. Economists predict it could dump the economy into another recession. Two of the world’s three foremost credit rating agencies have already downgraded South Africa’s economic status to junk.
Moody’s, the third of the three credit rating agencies, will have to make a decision on the 29th of March on whether they will do likewise.
With the recent continues black-outs, it will be a surprise if they do not downgrade the economy to junk. The majority of economists who were interviewed by Network24 predicted a downgrade of the economy.
Where does that leave businesses, business owners, investors, and salary workers? On a very steep and slippery slide made from ice. Where does it leave the country?
The featured image is a night-time photo taken by NASA of Europe and Africa. The glaring contrast between the two continents is so obvious even a pre-primary child will notice it. Europe is full of light and Africa mostly full of darkness with a splash of light here and there in between.
The answer to my question I will leave to your imagination; just think Dark Ages.
Eight areas are normally affected by rolling blackouts.
One of the greatest problems caused by last week’s blackouts is the absolute distrust created in investors, businesses and consumers. According to Dawie Roodt, chief economist at the Efficient Group, the loss of electricity will be a danger sign to foreign investors.
It will signal that business cannot be conducted due to blackouts which will lead to another recession. This, in turn, will lead to additional economic downgrading.
Rolling blackouts are extremely expensive. According to Peter Attard Montalto of Itellidex, the cost per day is R1 milliard per blackout phase which is implemented. With the continues blackouts this week the country has lost approximately R24 milliard.
Every business, farmer, and factory is affected by this. Farmers sustain crop damage, factories cannot work at full production capacity and businesses lose 20 to 30% of their workday.
Yet all these businesses and factories at the end of the day must still pay their overhead costs and workers’ salaries.
Without electricity, there is no water. It is an absolute reality which cannot be dismissed. Pumps need electricity to pump water into reservoirs and water towers. In Venezuela, where total or partial blackouts are the norm of the day, people resort to drinking water from the heavily polluted rivers. Elsewhere they tap water from stormwater or sewerage pipes.
In South Africa, the most probable scenario will be full-scale looting of shops and bottling plants for water. Then drawing water from heavily polluted rivers and dams.
When a blackout occurs it affects the security systems of both homes and businesses. Batteries that are old will affect the working functionality of gates and alarms. It is, therefore, easier for criminals to get access to a property. Since blackout schedules are made public, it is also easy for criminals to know where security will be at its lowest, thus making easier targets.
One of the most cumbersome effects of blackouts is non-working traffic lights. It causes major mayhem on the roads leading to traffic congestions, late arrivals at work and schools and accidents. Criminals also take advantage of areas where there are no lights at intersections, etc.
AgriSA has already warned about the dire consequences of blackouts on the farming sector. This especially concerns farmers who are relying on electricity to irrigate their crops. More than 25% of the countries food are being produced by farmers who are dependant on electricity for irrigation and dairy production purposes.
The danger of blackouts to the mining sector is quite severe. Apart from not being able to work at full production capacity, workers can also be stranded underground or in lifts. Mines try to adapt their schedules around the blackout schedule, but unexpected blackouts also occur.
8 Mobile Networks
Cellphone service providers struggle to provide services to their subscribers. MTN and Vodacom acknowledge that they struggle to keep their networks up and running with all the blackouts. Although they do have backup systems such as generators and batteries, the blackouts are too frequent. Batteries do not reach full capacity when they have to recharge and generators consume tremendous quantities of diesel.