Load shedding is to blame for the speed of South Africa’s industrial decline

Load shedding is to blame for the speed of South Africa’s industrial decline, and the problem is largely self-inflicted. . 

That’s the opinion of a Harvard University Professor and one-time advisor to the South African government.

Professor Ricardo Hausmann did not mince his words during a recent interview with the Johannesburg-based Centre for Development and Enterprise; load shedding is the cancer killing our economy. Many countries faced similar de-industrialisation challenges in recent times, but South Africa’s unfolding power supply crisis has turned a failure into a total flop, Hausmann said: “The speed at which this (de-industrialisation) has happened in South Africa since the global financial crisis of 2008 is orders of magnitude worse than anywhere else,” he said in an interview published this week by News24. "We found very strong evidence that this decline was strongly linked to the collapse in electricity provision."

Hausmann, who has studied South Africa for decades, also highlighted other obvious system failures, including the ‘double-whammy’ skills crisis: skilled South Africans are emigrating to take up better offshore opportunities, but skilled foreigners wishing to work here are being kept out by a dysfunctional Home Affairs.

It all adds up to an investment horror show that our local business community knows only too well. 

The corollary to Hausmann’s view about load shedding is that if we can put a stop to it, we can arrest the industrial freefall. As a business chamber we believe this is possible. It is painstaking, frustrating work, but the effort is nothing compared with the potential reward – an economy capable of fulfilling our potential. 

John Lawson
CEO of the Cape Chamber of Commerce & Industry