South Africa’s state capacity is collapsing, and the Growth Lab at Harvard University has provided a host of solutions to tackle some of South Africa’s biggest issues – including the energy crisis. According to the researchers, South Africa has two major issues undermining inclusive growth in the country – declining state capacity and spatial exclusion.
Looking at the former, the collapse of South Africa’s has been felt in several industries, including electricity, rail, ports and water, whilst also impacting the functioning of municipal governments. South Africa has also lost its comparative advantage in generating cheap and reliable electricity through its coal resources, which previously underpinned its competitiveness in energy-intensive industries, such as mineral processing. The lack of reliable energy supply has hurt the nation’s growth, with the South African Reserve Bank estimating that the electricity crisis is reducing growth by two percentage points