BP 505: Transformation in the Electricity Supply Industry

South Africa’s economy and business environment consists mainly of energy intensive industries including manufacturing, transportation, mining, and agriculture. These are some of the main contributors to the country’s gross domestic product (GDP) and to economic growth. There is a series of connections linking most of these industries – and their abilities to achieve economic growth – to the electricity supply industry. Electricity supply thus has great implications for economic growth, and is therefore considered to be the largest indirect contributor to the country’s GDP. South Africa’s industrial decline and falling economic growth are directly associated with decreasing sustainability and certainty in the provision of electricity, as the electricity supply industry continues to decay. The power crisis that quickly escalated to a ‘national emergency’ in 2008[i] served as a perfect example of such a co-dependent relationship between the economy and electricity supply. During this period most local businesses were affected and the country lost significant contributions in foreign investment and opportunities, resulting in massive job losses and increasing poverty.



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