- Economist Aroni Chaudhuri says energy and labour problems stopped South Africa from growing like other emerging markets since joining BRICS.
- If South Africa had enough electricity from 2007, the economy could have been 10% bigger and created one million jobs.
South Africa's economy is worse off now than it was 17 years ago. The average income per person has fallen below 2007 levels.
Per capita GDP measures how much the economy produces divided by the population. It shows the standard of living.
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When South Africa joined BRICS in 2010, many people hoped the country would grow fast and become a strong emerging economy.
Instead, South Africa performed worse than other emerging markets, according to economist Aroni Chaudhuri from Coface, BusinessTech reported.
He says the main problems are in the energy system and the labour market. These two sectors form the base of economic growth.
When they fail, other policies cannot fix the economy.
Load shedding played a big role. Warning signs about electricity problems appeared as early as 1998.
In 2015, research showed that load shedding cut economic growth by as much as 10%. If South Africa had reliable electricity from 2007, the economy could have been about 10% bigger by 2014.
This would have meant more than R300-billion in extra economic activity. It could also have created over one million job opportunities.
By 2008, load shedding had already cost the country around R300-billion.
Poor electricity pricing also made it hard for Eskom to earn enough money to keep the power system running properly.
Chaudhuri says future plans must focus on fixing the energy system. This means replacing old coal power stations and making sure there is a steady supply of electricity.
Eskom's finances have improved, but the utility still needs stable income to invest in infrastructure.
Rising electricity prices have also put pressure on households for many years. More people are now using alternative energy sources.
