THE biggest risks to South Africa’s 2024 economic outlook may come from insufficient power supply, strains on debt sustainability and the erosion of state legitimacy ahead of elections, according to Allianz SE.
The global financial services giant estimates that South Africa’s economy will expand 1.4% this year from the 0.7% forecast for 2023, but a lack of reliable electricity supply poses the heaviest drag on growth.
Africa’s most industrialised nation endures almost daily power cuts because years of neglect, corruption and mismanagement have left state-run electricity utility Eskom unable to keep up with demand.
Electricity outages prevent businesses, industry and households from realizing their potential and “it is improbable that sufficient capacity will materialise in the next 12 months,” Allianz said in its maiden Country Risk Atlas report.