Load-shedding makes South Africa poorer

There is a clear relationship between electricity consumption and wealth, which explains why Eskom load-shedding is so devastating to South Africa.

The relationship is illustrated by plotting electricity or energy consumption against gross domestic product (GDP) per capita.

It reveals that countries that consume less electricity have a far lower GDP per capita, while countries that consume greater energy are richer.

Five countries have energy consumption of lower than 100 kilowatt-hour (kWh) per person — Haiti, South Sudan, Niger, Ethiopia, and Benin.

These countries are some of the poorest in the world and struggle with problems like absolute poverty.

On the other end of the scale, numerous countries, which are typically very rich, consume over 10,000 kWh per capita.

These countries include the United States, Sweden, Luxembourg, Finland, Canada, Qatar, Bahrain, Norway, and Iceland.

Most of these countries are known for having stable and strong economies and their citizens enjoy high living standards.

The relationship between electricity and wealth is logical, as increased energy availability increases the number of production possibilities.

Industrial revolutions are characterised by technological developments significantly increasing production output.

The First Industrial Revolution, for example, was closely linked to steam power increasing productivity in manufacturing and accelerated transportation.

The Second Industrial Revolution integrated scientific knowledge into technological developments, leading to electrification used to power equipment, machinery, and tools.

The Third Industrial Revolution, which was largely based on the discovery of the semiconductor chip, also relies on a stable electricity supply.

Having enough or even excess electricity ensures that there are fewer restrictions on the extent to which an economy can innovate and grow.

In South Africa, the lack of a stable electricity supply is preventing businesses from growing and is putting a cap on economic growth.

The result is a decline in GDP per capita, which means South Africans are getting poorer while the rest of the world is getting richer.

Electricity consumption and wealth

The chart and table below show the relationship between energy consumption and wealth:

Country Electricity use (kWh/capita)
Haiti 40
South Sudan 41
Niger 51
Ethiopia 68
Benin 97
Tanzania 102
Democratic Republic of the Congo 105
Nigeria 142
Nepal 144
Togo 151
Kenya 167
Congo 194
Myanmar 220
Senegal 233
Sudan 264
Cote d’Ivoire 271
Cambodia 273
Cameroon 280
Angola 310
Bangladesh 317
Ghana 339
Pakistan 420
Mozambique 483
Sri Lanka 520
Nicaragua 562
Guatemala 601
Honduras 608
Philippines 691
Bolivia 728
India 797
Indonesia 808
Morocco 903
Syrian Arab Republic 908
El Salvador 950
Jamaica 1085
Gabon 1119
Iraq 1244
Colombia 1320
Peru 1334
Algeria 1369
Ecuador 1376
Tunisia 1408
Cuba 1448
Tajikistan 1486
Egypt 1592
Dominican Republic 1597
Namibia 1675
Botswana 1678
Paraguay 1682
Moldova 1725
Libya 1890
Jordan 1921
Costa Rica 1923
Kyrgyz Republic 1941
Armenia 1977
Mongolia 2032
Panama 2071
Mauritius 2182
Mexico 2186
Azerbaijan 2202
Albania 2309
Thailand 2484
Lebanon 2583
Romania 2584
Turkmenistan 2586
Brazil 2611
Georgia 2694
Turkiye 2815
Kosovo 2818
Iran 2928
Argentina 3075
Uruguay 3093
Bosnia and Herzegovina 3361
Ukraine 3419
Suriname 3493
Latvia 3507
North Macedonia 3514
Cyprus 3549
Belarus 3690
Croatia 3714
Lithuania 3821
Chile 3895
China 3905
Hungary 3966
Poland 3972
South Africa 4184
Serbia 4272
Malaysia 4539
Montenegro 4612
Portugal 4663
Bulgaria 4709
Curacao 4798
Malta 4925
Italy 5002
Greece 5063
United Kingdom 5130
Slovak Republic 5137
Spain 5356
Kazakhstan 5600
Ireland 5672
Denmark 5859
Hong Kong 6083
Czechia 6259
Oman 6475
Israel 6601
Russian Federation 6603
Trinidad and Tobago 6661
Netherlands 6713
Slovenia 6728
Estonia 6732
France 6940
Germany 7035
Switzerland 7520
Belgium 7709
Japan 7820
Austria 8356
Singapore 8845
New Zealand 9013
Saudi Arabia 9048
Brunei Darussalam 10121
Korea 10497
United Arab Emirates 11563
United States 12994
Sweden 13480
Luxembourg 13915
Finland 15250
Kuwait 15298
Canada 15588
Qatar 16415
Bahrain 19970
Norway 23000
Iceland 53832

This article was first published by Daily Investor and is republished with permission.

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Load-shedding makes South Africa poorer