Abstract
South Africa has been grappling with a persistent electricity crisis that has placed the country on an uncertain and turbulent economic trajectory. Based on a two-stage empirical approach, this paper unpacks the extent to which the country's manufacturing sector has been affected by this crisis. Notably, we first use South Africa's domestic input–output matrices to develop an index of manufacturing sub-sector energy vulnerability. The index reveals significant degree of heterogeneity across manufacturing sub-sectors, highlighting cross-sector differences in the level of exposure and susceptibility to the energy-related crises. Second, we employ the self-constructed energy vulnerability index in a flexible empirical framework to examine the effect of the electricity crisis on manufacturing sector jobs in the country. The empirical analysis results indicate that the electricity crisis is associated with significant job destruction, with this adverse effect severe for sectors with higher energy vulnerability intensity. The severity of this adverse effect holds irrespective of the nature of jobs, whether formal or informal. We discuss the implication of these findings in line with South Africa's economic recovery, resilience and development.
•South Africa's electricity crises pose significant challenges to the country's long-term development.•The energy vulnerability of manufacturing sectors is not uniform across sectors.•Electricity crises destroy manufacturing jobs and is severe for sectors with higher energy vulnerability intensity.•The manufacturing job effects of electricity crises is jointly driven by the extensive and the intensive margins of the crises.