Macro-fiscal analysis

Presentation: Assessing the macroeconomic impact of power outages in South Africa with Richard Kima

April 2024

 UNU-WIDER Research Fellow Richard Kima, presents his work in progress Working Paper titled "Estimating the Macroeconomic Costs of Power Outages in South Africa" at the South African Reserve Bank Research Seminar on April 11, 2024, and at the University of KwaZulu-Natal's Macroeconomics Research Unit Seminars on May 6, 2024. The paper assesses the full-scale macroeconomic costs of power outages in South Africa, commonly referred to as "load shedding," within a structural dynamic macroeconomic model following the methodology of Fried and Lagakos (2023). In this model, power outages create idle resources that diminish the scale of existing firms and discourage the entry of new firms, resulting in lower productivity. The model is calibrated to the South African economy and serves as a laboratory for various experiments, including estimating the short- and long-run effects of eliminating power outages and evaluating their costs. Preliminary findings suggest that the monetary costs of unadjusted load shedding for the South African economy were approximately R 911 billion in 2022, equivalent to R 632 billion in real terms, representing an output loss of 13.7%.

More information on the University of Kwa-Zulu Natal´s Macroeconomics Research Unit Seminar is available here

Interested participants can join the virtual session using the details below.

May 6, 2024, 02:00 PM GMT +2
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Meeting ID: 951 9774 6692
Passcode: 270029