Seen from afar SA is not normal

After enjoying the first full 24-hour period without load-shedding last week, and relatively lower stages of load-shedding during the past two weeks compared with the rest of the year, the temptation is there to want to celebrate the brief return to almost normal.

In fact, as households and businesses do what they can to adapt to the likelihood of two more years of load-shedding, living without power for four or six hours a day can feel almost like a new normal.

But as executives attending an information day for the platinum group metals (PGMs) sector heard from equity and commodity analysts, seen from afar the situation in SA is definitely not normal, not even close. For international investors, said one equity analyst, the expectation of a 5% decline in PGMs output in 2022 because of mines having to comply with higher levels of load curtailment is "horrifying".

They were also having to field questions, said the analyst, about the likelihood of a complete national blackout — an eventuality SA businesses are now preparing for, even though Eskom and the government assure us the chances of this happening are very low. This makes for a very risky investment environment.

As SA enters the high winter demand period and the likelihood of prolonged load-shedding at higher stages looms large, from close-up a few days at stage 1 and 2 might seem like good news, but from far away the picture is one of a nation in decline.