Load-shedding becomes a binding constraint on growth

South Africa's growth charts have been essentially flat through much of the 2010s and 2020s, and the South African Reserve Bank's own account increasingly points to electricity shortages as a primary cause rather than monetary conditions. Governor Lesetja Kganyago told an audience in July 2023 that load-shedding had intensified over the preceding two years to the point of becoming a binding constraint on growth, with the SARB estimating that GDP growth over 2023-25 would run close to 2% in the absence of outages, roughly double the pace it was actually forecasting with them included. At the same time, headline inflation - which peaked at 7.8% in July 2022 - had returned by mid-2023 to the SARB's 3-6% target band around a 4.5% midpoint, after the Bank raised its repo rate by a cumulative 400 basis points since May 2022 to 8.25%. Kganyago was explicit that monetary policy alone could not fix load-shedding, logistics bottlenecks, or corruption, since those require government action - an admission that helps explain why South Africa's inflation series has been brought under control even as its growth series has stayed depressed for so long.