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The local metals and engineering sector cannot grow as a result of South Africa’s unreliable energy supply and the fact that, on average, energy costs in the sector account for about 8% of intermediary input costs, Steel and Engineering Industries Federation of Southern Africa (Seifsa) CEO Kaizer Nyatsumba said on Wednesday.
“It is unfortunate that, even right now, the sector could not operate at full capacity as a result, among other things, of energy constraints. Actual or realised economic growth in the South African economy has fallen substantially below its potential.
“While energy provision should support our growth ambitions, there appears to be a real danger of the two gradually drifting apart,” he added in a statement.
He further noted that it was regrettable that electricity generation had become a significant physical constraint that hampered the economy’s ability to grow at a faster rate, adding that the situation ran counter to government’s stated intention to stimulate local manufacturing and value addition.
Seifsa has, on several occasions, expressed concern about the impact of the energy supply constraints on the manufacturing sector.
To highlight the manufacturing sector’s plight, the energy constraints and its impact on South Africa’s economic growth would form part of the key discussions on the first day of the upcoming two-day Southern African Metals and Engineering Indaba, on May 28 and 29, at Emperors Palace, in Ekurhuleni.
Energy Minister Tina Joemat-Pettersson, Public Enterprises Minister Lynne Brown, Eskom acting CEO Brian Molefe and Johannesburg City Power MD Sicelo Xulu would join a panel of industry stalwarts to discuss the energy challenges and possible solutions.