Johannesburg, 6 February 2023: South Africa’s energy crisis is at the forefront of everyone’s minds, with many wondering if it can be fixed at all. Fred Razak, Chief Trading Strategist at CMTrading takes a closer look at the issues and offers his thoughts.
“If we were to put South Africa’s energy crisis in terms of a Doomsday clock, the current situation is roughly one second to Armageddon. The country cannot survive like this. Consistent, reliable energy is essential for a healthy GDP and its growth. From manufacturing and distribution, to retail, and any large corporation to small businesses, whatever it is, a country cannot function like this. It needs to be fixed with urgency.”
“If it doesn’t get fixed, not only will you lose money through the products that aren’t being produced and services not rendered, but you will also lose citizens. People are not going to be able to sustain themselves. So for those with dual citizenship or some other ability to leave, they end will end up leaving. This is going to have ripple effects across the economic system.
The causes from an international perspective
“South Africans almost certainly have a more nuanced understanding of the causes of load shedding, but to the international community, it looks like corruption, mismanagement and lack of care by the government caused the energy crisis. It all boils down to a lack of empathy. How can you let your citizens live like this? That means it’s your family, your relatives, it’s your extended family. It’s complacency and lack of care and highlights one of human nature’s more base, self-destructive behaviours.”
Will international renewables investments be able to lure SA away from coal?
“I am not sure that’s going to be the case because I think that if you have coal and it costs more to export than to consume it yourself, it makes sense to consume it yourself. You will want to transition away from coal over time, but I think the situation is so bad that you need to take care of this situation today, using whatever resources you have to do so.”
Are the Karpower ships the answer?
“It’s difficult to tell without knowing all the options if the ships themselves are the answer for now. But do I think South Africa should be looking to international technology to solve the energy crisis? Oh yes. This needs to be taken care of asap. Bottom line. So whatever way you can best do that, that’s what I think needs to be done.”
How soon could South Africa feasibly get out of this energy crisis?
“I know it’s not going to be a quick transition, but I can’t emphasise enough how much effort needs to be put into ending this. The morality of it, the country’s self-respect, it’s unheard of for a country in 2023 not to have electricity for 24 hours and more. And it’s not like Africa doesn’t have the natural resources to make it happen. You have the space; you have the resources”.
“The good news is that a quick turnaround is possible if the will exists. Look how fast China and Abu Dhabi came together. Look at Dubai; they put up the city just like that. At the end of the day if you don’t respect yourself, no one else is going to respect you. It’s a very simple concept and I think any country that wants to promote products and services overseas needs to take care of this as quickly as possible”.
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