Load shedding is having a direct impact on the South African economy and across all banked transactions.
This is according to the BankservAfrica’s monthly Economic Transaction Index (BETI) data for March, the broadest evidence-based early indicator and represents the majority of transactions in the South African economy.
“The March BETI declined across all measurement periods,” explains Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements.
“In March, banked economic transactions declined by 0.4% from February. On an annualised basis, the BETI dropped by 1.8% and declined by 0.6% on a quarterly basis. All of these are clear indications of the deteriorating state of the economy at present,” says Naidoo.
According to Mike Schüssler, chief economist at Economists dotcoza, the load shedding situation has hit South Africa’s economy hard.
“It is clear that the extensive load shedding in March hurt the economy with the real value of transactions down, and the actual value of transactions declining for the first time since April 2017,” he says. “The economic business cycle is still in a downward trend according to the BETI and it seems very likely that the domestic economy will show a decline when the Q1 2019 GDP figures are published.”
Meanwhile, the standardised nominal value of the BETI was R875,7-billion while the average value per transaction was R8 444. This is the first nominal rise in 23 months, according to Naidoo. This rise, however, is owed to the VAT refunds in March. Without this, nearly R20-billion worth of VAT repayments paid into the National Payments System, the March BETI would have been worse off.
“This increase also suggests that transactions of higher value were made in order to minimise the number of transactions during the load shedding period,” explains Schüssler.
“Overall, the fact that the BETI showed a 0.6% decline from the previous quarter suggests the economy’s resilience. Firms and customers, along with employees, are still trying to transact and go about their normal business as much as possible,” he adds.
“Still, based on the BETI data and other economic indicators, it is very likely that the South African economy will start the 2019 year on weaker levels. One can expect economic growth forecasts to be slashed.”