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S.Africa hit by rolling blackouts as state utility struggles

South Africa was hit by rolling blackouts on Wednesday in a blow for the continent’s most developed economy as it shows signs of rebounding.

Embattled power company Eskom, which generates around 95 percent of the country’s electricity, announced power rationing — infamously known as load-shedding — would be implemented from 9:00am to 11:00pm (0700 GMT to 2100).

The stage two load-shedding was “in order to protect the power system from a total collapse,” the state utility said in a statement.

Rolling blackouts in February and March saw factories and homes plunged into darkness for long hours, negatively impacting business and dampening job creation prospects.

The announcement is a blow to the government of President Cyril Ramaphosa, who took office in 2018 promising to revive the country’s struggling economy.

Recently there have been some positive signs for the economy, which grew 3.1 percent in the second quarter, avoiding a recession after a 3.1 percent Q1 contraction.

“The timing is particularly problematic and embarrassing for President Ramaphosa,” said political economy analyst Daniel Silke.

Silke said the news undermines Ramaphosa’s message as the president tries to spur international investment, having spoken at a Financial Times conference in London this week.

“We are also awaiting a rating agency review from Moody’s, the one agency that keeps us above a sub-investment grade,” Silke told AFP.

He linked the county’s decaying power infrastructure to the “state capture” scandal, which saw the systematic plunder of government coffers under Ramaphosa’s predecessor Jacob Zuma.

“We are seeing the after-effects of years of corruption and mismanagement,” Silke said.

Ramaphosa told the London conference that the state capture case was estimated to have cost the country more than 500 billion rand ($34 billion).

The main opposition party Democratic Alliance warned that productivity would be hit by the blackouts, leading to unemployment.

“They simply cannot keep the lights on,” the DA said in a statement.

Eskom has accumulated $30 billion of debt despite being the recipient of multiple bailouts from the government.

South Africa’s dropped 0.7 percent compared to the dollar on Wednesday morning.