South Africa’s economy at a pivotal point as outlook improves but political, energy risks remain
LONDON – South Africa’s President Cyril Ramaphosa speaks during a press conference in central London on November 24, 2022
JUSTIN TALLIS/AFP via Getty Images
South Africa’s long-awaited economic reforms have begun to improve the country’s outlook, but the age-old problems of political uncertainty and a failing power system still pose significant risks.
The Economic Reconstruction and Recovery Plan has been a key tenet of President Cyril Ramaphosa’s agenda since he succeeded Jacob Zuma as the country’s leader in 2018. But deep divisions within the ruling African National Congress (ANC) and his own cabinet have made for sluggish progress.
The suite of reforms — focused on energy security, infrastructure development, food security, job creation and the green transition — is designed to create a “sustainable, resilient and inclusive economy,” the government says.
And — some at least — appear to be working. S&P Global Ratings earlier this month affirmed its positive outlook on the country, saying that government measures to stimulate private sector activity could boost growth, and the measures had the potential to ease economic pressures.
“There is some hope in the public finances in South Africa, mainly due to the increase in government revenues as a result of higher commodity exports, and also due to the progress made in reducing debt and debt distress, and to ushering a public deficit,” Aleix Montana, Africa analyst at risk consultancy Verisk Maplecroft, told CNBC last week.
However, political frailties and persistent issues at a state-owned utility continue to pose present economic risks.
Ramaphosa faces a “perfect storm of inflation, electricity cuts and corruption accusations that will continue to deteriorate South Africa’s profile and to pose risk for investments in the country,” Montana said.
A report into an alleged corruption scandal surrounding Ramaphosa is set to be examined by the National Assembly on Dec. 6, just 10 days before the party conference of his ruling ANC (African National Congress).
Energy woes
Though Ramaphosa is expected to secure a second five-year term, Montana said he will have to improve his credibility on economic and anti-corruption reforms in order to continue pushing through his agenda. The economy also remains at risk from persistent disruptions at state-owned companies, such as power utility Eskom.
South Africans have faced rolling blackouts as Eskom — which has long been a thorn in the side of the country’s economy — contends with shortfalls in generation capacity due to equipment failures and diesel shortages.
The company has warned that power outages, known as “load-shedding,” will continue for the next six to 12 months, and recently said it had run out of funds to acquire the diesel needed to run auxiliary power plants that are deployed during periods of peak consumption or emergencies.
Montana said that in order to secure sustained economic growth, the South African government will need to prioritize energy sustainability.
“Energy will require financial assistance from international players, but they will also need to ensure that it doesn’t have a negative impact on South African society,” he said.
“Apart from financial challenges, a lot of citizens of South Africa are employed in Eskom or in the fossil fuels sector, so the government will need to ensure that in their plan, they mitigate this potential impact of transitioning from a fossil fuels-based economy to the implementation of renewables in order to sustain electricity stability.”
Asked about this issue on a recent state visit to the U.K., Ramaphosa told CNBC’s Arabile Gumede that the problems at Eskom started long before 2014, when former President Jacob Zuma appointed him to address the country’s energy problems.
“As we are generating electricity, power stations keep breaking — many of them are old — but we are trying with a new boat, the management that’s in place to address this problem,” Ramaphosa said.
“So the problems of Eskom were seeds that were planted many years ago, rather than in 2014, and because we’re dealing with huge, complicated and complex machinery, it’s not a one-day fix, it can never be as these are very complex processes.”
He added that the government was working to reduce load-shedding requirements and to “ensure that the money’s there,” noting that Eskom “used to be the best utility in the world.”
“Do I have confidence that we will solve these problems? Yes, I do. I do have enormous confidence that we will solve them,” he said.
“But I think it’s important to have an appreciation of where we’ve come from, and obviously, it is very easy to put all the blame on the president, to put all the blame on the government, and yet these problems have come way back from the past.”
‘Taming the monster’ of inflation
Along with the domestic issues unique to South Africa, the country also faces the same inflationary pressures that have plagued economies around the world over the past year.
Annual headline inflation rose to 7.6% in October, defying the South African Reserve Bank’s expectations for price pressures to ease. This prompted the bank’s Monetary Policy Committee to hike interest rates by an aggressive 75 basis points last week, taking the benchmark repo rate to 7%.
This marked the seventh consecutive meeting at which monetary policy had been tightened, and central bank Governor Lesetja Kganyago said in a press conference that it must “tame the monster of inflation.”
With prices rising much faster than the central bank’s 3-6% target, Kganyago noted that the SARB needs to see clear evidence that inflation has not just peaked, but begun to sustainably decline toward the midpoint of the range.
But further monetary tightening will place additional pressure on the economy.
“We think that inflation is unlikely to return within the target range (let alone the midpoint) in the coming months, keeping policymakers in tightening mode well into 2023,” said Virág Fórizs, emerging markets economist at Capital Economics.
She flagged that food inflation continues to increase, offsetting some of the effects of softening fuel price pressures, while core inflation is likely to remain high. Capital Economics expects inflation to hover around 7.5% annually until early 2023, before dropping markedly around the middle of the year.
Fórizs said the weakness of the economy is unlikely to prevent further rate hikes, with growth concerns playing second fiddle to inflation worries. South African GDP contracted by 0.7% in the second quarter.
“While the end of the tightening cycle is not yet in sight, we expect the pace of tightening to slow over the next MPC meetings,” she noted.
Three MPC members voted to hike rates by 75 basis points last week, while two voted for 50 basis points. It marked an apparent softening of approach by some who voted for a 100-basis-point rise at the previous meeting.
“All in all, we’ve penciled in 100bp of further increases in the repo rate, to 8.00%, by Q2 2023,” Fórizs said.
Donald Trump signed two executive orders today that walked back parts of tariffs he previously imposed on US automakers ahead of a rally in Michigan to mark his first 100 days in office.
The Wall Street Journal first reported today in an exclusive that Trump was “expected to soften the impact of his automotive tariffs, preventing duties on foreign-made cars from stacking on top of other tariffs and easing some levies on car parts.”
Trump signed an executive order making sure the 25% tariffs on vehicles and certain auto parts won’t stack on top of existing aluminum, steel, or Canada and Mexico tariffs. He also gave automakers a credit to help blunt the impact of the 25% duties on imported parts that go into US-built cars.
Trump’s backpedal comes after weeks of meeting with automaker executives, and a week after a coalition that included GM, Toyota, Volkswagen, and Hyundai sent a letter urging him to drop tariffs on foreign auto parts due to land in May.
American Automotive Policy Council (AAPC) president Matt Blunt today said in response to the executive orders, “American Automakers Ford, GM, and Stellantis appreciate the administration’s clarification that tariffs will not be layered on top of the existing Section 232 tariffs on autos and auto parts. Applying multiple tariffs to the same product or part was a significant concern for American automakers, and we are glad to see this addressed. We will review the details of the executive order closely to assess how effectively it will mitigate the impact of tariffs on American automakers, our domestic supply chains and ultimately American consumers.” The AAPC represents Ford, GM, and Stellantis.
Electrek’s Take
The 25% auto tariffs implemented under Section 232 of the Trade Expansion Act aren’t going anywhere, and most economists say that tariffs will raise car prices and slow auto sales. This White House Fact Sheet is titled, “President Donald J. Trump Incentivizes Domestic Automobile Production.” Where’s the incentive? US automakers are just getting hit with the stick once instead of twice, and they’re thanking Trump for it.
The carrot that worked as an incentive was Biden’s Inflation Reduction Act, along with the stability that came with it. All this whiplash is terrible for the US and global economy.
Read more: Killing IRA EV tax credits will ruin US EV and battery industries – Princeton study
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New data suggests that the Tesla Powerwall 3 is significantly disrupting the US solar inverter market.
The home battery pack’s integrated inverter is changing the game.
Tesla acquired its solar business when it bought SolarCity in a controversial deal due to Musk being a large shareholder of both Tesla and SolarCity, and Musk’s cousin led the latter.
The automaker kept the SolarCity operations going for a few years. In fact, it continued until after Tesla shareholders sued Musk over the acquisition, and Musk defended himself by claiming that SolarCity had become an integral part of Tesla.
Shortly after he won the lawsuit, Tesla virtually stopped all operations that came from its SolarCity acquisition, which primarily consisted of residential solar financing and installations.
Tesla even stopped reporting solar deployment. The company’s energy business now consists almost entirely of Powerwall and Megapack deployments.
However, the launch of the Powerwall 3 has indirectly brought Tesla back into the solar business, as the home battery pack features an inverter that works for both solar and storage applications.
EnergySage is a company that matches solar installers with potential buyers, and as a result, it has a wealth of interesting data about the solar industry in the US. Today, it released its Spring 2025 Marketplace report.
In the report, EnergySage revealed that Tesla became the second-most quoted inverter brand in the second half of last year:
Tesla became the most quoted battery brand in H2 2024, occupying 63% of Marketplace share nationwide. Because the Powerwall 3 includes an integrated inverter, Tesla also became the second-most quoted inverter brand. With batteries increasingly being added to solar systems—the national battery attachment rate jumped to 45% in H2 2024, an all-time high—Tesla’s growth was a key driver of the low storage and solar prices seen on EnergySage. In 2025, we are examining whether brand backlash and equipment shortages will affect Tesla’s Marketplace share.
This is also a byproduct of the increased popularity of energy storage systems when deploying new solar systems.
In big solar markets like California and Texas, the majority of residential solar quotes are attached to batteries, and Tesla is not the top quoted brand, thanks to Powerwall 3:
Powerwall was already the preferred home battery pack for many homeowners, and the fact that it now includes a solar inverter has made it even more attractive, as most home energy storage systems in the US are being deployed along with rooftop solar.
The Powerwall 3’s solar inverter integration is pushing solar plus storage costs down quite a bit.
The popularity of the Powerwall 3 has particularly hurt Enphase, a leader in solar inverter. It had 73% of the US market in 2022, and now it is down to 53%.
Despite Tesla driving prices down, Powerwall 3 is not the cheapest battery pack available. Panasonic and EG4 batteries were both priced lower on a per kWh basis than Tesla’s in the second half of 2024, but Tesla won on cost when also replacing the solar inverter.
However, it’s not all good news from Tesla. EnergySage also recently reported an increase in customers requesting alternatives to Powerwalls in 2025, partly due to Elon Musk’s increasing controversy.
If you’re interested in installing solar panels and/or batteries for your home, we recommend using EnergySage. You will be able to get quotes without any hassle and only talk to someone when you are ready to move forward. Within minutes, you can get on the path to producing your own power with solar and battery storage, including with Powerwall.
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Here’s something most people don’t know: In the US, switching to solar and battery-based energy can actually save you money on taxes. And it’s not a future promise – it’s happening right now. Under the US Residential Clean Energy Credit, BLUETTI’s eligible solar systems and home batteries qualify for a 30% federal tax credit through 2032. That means with the right model, like the AC500 Home Battery Backup, you’re not only saving on electricity, you could also get a portion of your purchase back during tax season.
Meanwhile, gas generators are quietly costing more
There’s a reason so many people have relied on gas generators: they’re familiar, accessible, and have served us well for years. But as fuel prices continue to rise and usage becomes more frequent, the hidden costs of gas generators are quietly piling up:
- Ongoing fuel expenses, especially during summer or storm seasons
- Routine maintenance and part replacements
- Stricter regulations in certain areas limiting usage times
- Noise complaints and environmental concerns
It’s not about shaming these tools—it’s about recognizing when the cost-to-benefit ratio starts to shift.
Not ready to give up your generator? Start small with the BLUETTI AC60
The move to clean energy doesn’t have to be all or nothing. Sometimes, the right first step is simply trying a lightweight alternative, like the AC60 Portable Power Station (Pioneer 50).
- Compact and powerful: 600W output (1000W surge) covers most outdoor needs
- Historically affordable: Only $269 after subsidy
- Fast charging: 80% charge within an hour
- IP65-rated for water and dust resistance – ideal for outdoor life
- Backed by a 6-year warranty, cutting down on waste and replacement costs
- Expandable to 2,015Wh capacity for powering phones, laptops, and more
Whether you’re into camping, road trips, or just want something for light backup at home, portable power stations like AC60 are an easy way to test the waters – no big commitment needed.
Need something stronger? Apex 300 is built to last
For those looking to level up their home battery backup or long-term savings, the Apex 300 offers a durable, future-forward alternative. With second-gen EV-grade batteries rated for 6,000+ cycles, this power station can last up to 17 years – nearly twice as long as typical models.
More reasons why Apex 300 stands out:
- Ultra-efficient 20W AC idle drain extends fridge runtime by up to 24 hours and boosts CPAP usage by 2.5x compared to typical units
- Built-in 120V/240V dual output with 12,000W bypass that powers 99% of home appliances, even a Tesla EV
- 2-year savings sprint when paired with one Solar X 4K Charge Controller for a massive 6400W solar input
- Whisper-quiet at 40dB, no fumes, no fuel
- Time-of-use savings made easy: Easily schedule and monitor energy usage with a user-friendly app and a clear, intuitive LED screen
- Expandable ecosystem: Add extra B300K batteries or a smart 700W Hub D1 to grow your setup as your needs evolve, from whole-home backup to off-grid RV power
This isn’t about replacing your gas generator overnight. It’s about introducing a better Plan B that’s cleaner, quieter, and built for the long haul.
Thinking about a cleaner future? BLUETTI is offering a little help
In honor of Earth Day, BLUETTI has launched a new Clean Energy Incentive Program. Gas generator owners around the world can submit basic info about their devices and select a clean power product to receive an exclusive subsidy.
The compact AC60 and other select models are already available at subsidized prices through BLUETTI’s Clean Energy Incentive Program – a practical step designed to support a smoother, more affordable transition to greener living.
Meanwhile, early access to the all-new Apex 300 Portable Power Station is now open through May 19, ahead of its official launch on May 20 on Indiegogo.
Going green isn’t about rushing
It’s about small, thoughtful choices that build toward something better – for your home, your wallet, and the planet. BLUETTI believes real change happens step by step, just like the LAFF (Light An African Family) Initiative. By walking the same path as those in need, the team can better understand and manage which solutions will most effectively help families who need affordable, sustainable energy.
So even if your gas generator still works just fine, it might be worth looking at a smarter backup. The future doesn’t have to be all-or-nothing. It can start with one quiet step with BLUETTI’s solutions, and this simple step could lead to a brighter, more sustainable future for everyone.
About BLUETTI
BLUETTI is a dedicated advocate for sustainability, integrating ESG principles throughout product design and corporate initiatives. Through impactful projects like LAAF (Light An African Family), BLUETTI provides affordable, sustainable energy solutions to communities across Africa. By partnering with Leave No Trace, a 501(c)(3) nonprofit, BLUETTI supports responsible outdoor recreation through clean energy solutions that minimize environmental footprints. This blend of craftsmanship, reliability, and a focus on real-world needs is what makes BLUETTI trusted in over 110 countries and regions.
Follow BLUETTI on Twitter/X here and on Facebook here.
All photos: BLUETTI
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