The ailing economy is expected to take a further beating as the country battles its worst power outages in seven years because of surging demand for electricity. Eskom has been struggling to keep the lights on since November with consumer demand repeatedly eclipsing supply.

Now, with heavy industry told to reduce consumption by at least 10% and the country’s growth forecast revised downward, the government is scrambling to allay investor jitters and calm public angst. Government was warned as far back as 1998 about a possible system collapse in a policy document presented to parliament. But it was only in 2007 that work began at Medupi to build the country’s first new power station in 20 years. The first unit of the 4,764MW facility was initially expected to deliver power in 2012, but numerous delays have since pushed that deadline to June this year.

"The potential impacts that load-shedding will have on business, business confidence and consumers alike is inestimable," South Africa Chamber of Commerce and Industry president Vusi Khumalo said. Steel and Engineering Industries Federation of Southern Africa (Seifsa) chief economist Henk Langenhoven estimated that electricity disruptions could slash production by 23%. He said the detrimental effect of insufficient power and the "cumulative effect of the uncertainties does not bode well for 2015". In January the Reserve Bank revised its 2015 growth forecast down from 2.5% to 2.2% — specifically fingering the electricity woes.

Reserve Bank figures show that after a quarter-to-quarter decline of 4% in April-June, manufacturing production contracted at a rate of 3.4% in the next three months. At 24.5%, unemployment remains the elephant in the room for the government. "As long as the power crisis is still with us, I don’t see how the country can manage growth and create jobs," said Free Market Foundation economist Loane Sharp. Mr Sharp estimated the outages would shave off 0.4% of gross domestic product (GDP) growth this year. "This situation is going to have long-term effects on growth. It’s worrying," he said. "The system will remain tight for the next two to three years, when our new power stations are fully operational," Eskom spokesman Khulu Phasiwe said.