Monday, October 12, 2009

South Africa's expectations of growth are fantasies thanks to Eskom

Where most countries in Africa have already made provision to expand their infrastructure to keep up with economic growth, South Africa failed to expand capacity at its electricity utility Eskom.

SHOOT: I wonder how this happened? I mean, gasp, were the people at Eskom possibly, eek, not doing their jobs? By all means, keep those non performers there. That way we can level the playing field into an entire country of non performers.
clipped from
South Africa is the worst performing economy in Africa this year, according to the World Economic Outlook of the International Monetary Fund (IMF), released yesterday.

Of the 20 African countries listed, it is the only one whose economy is expected to contract - by 2.2 percent.

And its expected growth of 1.7 percent next year is the lowest on the continent.

Zimbabwe, considered the basket case of Africa, is starting to recover as the benefits of tentative policy reform feed through. The IMF forecasts growth of 3.7 percent this year and 6 percent next year - after a 14.1 percent contraction last year and 6.9 percent shrinkage the year before.
However, he also identified "structural rigidities" in South Africa such as the rigid labour market, as well as the fact that the local economy has run into an unexpected "bottle neck".

"In Nigeria, for instance, which produces very little electricity, businesses have been running on generators.
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