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South Africa power cuts hit factory manufacturing

South Africa power cuts hit factory manufacturing

The inability of South Africa’s main power producer Eskom to meet demand is not only hurting the continent’s most-industrialised economy but affecting manufacturers on an island more than 2 000 miles away.

Chronic power shortages have reduced demand for Mauritian manufactured goods by South African retailers, the main buyer of products from Mauritius, Arif Currimjee, the outgoing chairman of the Mauritius Export Association, said in an emailed response to questions.

The outages pose a “downside risk” to growth in the industry after two straight years of recovery, he said.

The power cuts, which intensified in 2022, have led to a slump in demand, increased costs and reduced trading hours for South Africa’s retailers. Their sales have declined for four of five months, compared with a year earlier.

Sales to South Africa of manufactured goods from Mauritius fell almost 29 percent to 2,07 billion rupees (US$46 million) in the final quarter of last year, compared with the prior three months.

The Foschini Group in March estimated the outages cut its retail revenue for the 2023 financial year by about R1 billion and robbed it of 345 000 trading hours in the 11 months through February 28.

Eskom Chairman Mpho Makwana said last week the utility is only expected to return to “healthy energy availability” by March 2025.

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