It is "obvious" that load shedding will have a dampening effect on the SA economy, the full extent of which will only be known in time, Trade and Industry Minister Rob Davies has said.
The minister was speaking on government's role in SA's economic recovery at an event hosted by the Cape Town press Club on Tuesday.
Taking questions from journalists, Davies responded to concerns about the effect of the recent spate of load shedding on the economy, and investor sentiment.
"It is pretty obvious load shedding will have a dampening effect on the economy. It means production is not happening at the scale at which it was happening," he said.
Davies recalled conversations with potential investors at the Investment Summit held in 2018. President Cyril Ramaphosa had launched an international investment drive to raise $100bn over five years.
At the time, Davies said investors indicated they would take a "long-term view" of SA. "When you invest, you make a bet that things will be sorted out and will improve over time as you are investing," he said.
To illustrate the impact of load shedding on productive activity in the country, the minister referred to a manufacturing plant in Atlantis in the Western Cape, which produces Hisense products such as televisions and fridges, and which is now one of the best performing Hisense plants in the world.
However, load shedding impacts production at the plant, which could elect to rely on its own generation to ensure reliable power supply.
The problem is that small businesses, black industrialists and township businesses do not have the resources to rely on their own power generation, Davies said. They rely on Eskom, which it is why it is important to get things right at the power utility.
Quoting the president, Davies said Eskom is now one of the biggest risks to the economy.
There are serious issues of governance and technical capacity which must be addressed, he added.
The president's approach to restore technical capacity at the power utility, is the "only way" forward for Eskom, he argued.
Investors and ratings agencies want to see if SA is moving to put things right at Eskom, Davies said.
Smoke out corruptors
Commenting on state capture, and its relationship to Eskom, Davies said that no one intentionally wrecked the power utility. But individuals saw opportunities to "take a little bit" here and there.
Eventually it all accumulated to institutional damage of significant scale, he said.
Davies believes those implicated in corruption must be "smoked out".
Specifically, there must be consequences for those who improperly acquired tenders and other benefits.