For more than a decade, South Africa’s economic narrative was framed by constraint. Rolling electricity outages (load shedding), fragile infrastructure, and chronic uncertainty shaped business planning and investor confidence. Load shedding became not just a technical failure, but a psychological one, a constant reminder that growth came with friction.
As 2026 approaches, that narrative is changing largely out of view.
This is not a claim that South Africa’s structural challenges have disappeared, nor that its economy is suddenly insulated from global volatility. Rather, it is an observation that one of the most destabilising variables in the system, unreliable electricity supply, has receded sufficiently to allow economic fundamentals to reassert themselves. The implications of this shift extend beyond energy policy or domestic recovery. They reach directly into global supply chains, commodities markets, and international procurement decisions. The question for procurement professionals is no longer whether South Africa can keep the lights on, but what sustained power stability means for sourcing, pricing, risk, and long-term supplier strategy.
Eskom and the End of Emergency Economics
Eskom, South Africa’s state-owned electricity utility, has historically held a near monopoly over electricity generation and transmission. Its supply crisis defined economic life throughout the 2010s and early 2020s. Load shedding escalated from a contingency tool to a structural constraint, reaching unprecedented severity by 2022 and 2023. Households and businesses adapted defensively. Diesel generators, battery systems, inverters, and rooftop solar installations became essential infrastructure rather than discretionary investments. For many small and medium-sized enterprises, survival depended on the ability to self-generate power.
This adaptation came at a significant economic cost. Capital expenditure rose sharply, operating costs increased, and productivity was lost during outages. At a macroeconomic level, electricity instability functioned as a persistent drag on growth, equivalent to a hidden tax on economic activity. By late 2024 and throughout 2025, Eskom achieved something that had previously seemed unattainable. South Africa experienced extended periods of uninterrupted electricity supply, measured in months rather than days. While the system has not been flawless, the scale and consistency of improvement mark a structural shift rather than a temporary reprieve.
Eskom attributes this turnaround to improved maintenance discipline, the return of generation units to service, stronger operational oversight, and tighter performance management. External analysts point to a broader mix of factors, including reduced unplanned outages, suppressed demand following years of crisis, the rapid expansion of private embedded generation, and the increasing contribution of renewable energy feeding into the grid. The reality likely lies somewhere in between. What matters economically is not the purity of the solution, but its effect. Businesses can plan again. Factories can run predictable shifts. Investment decisions are no longer hostage to rolling blackouts.
Diesel, Coal, and the Cost of Keeping the Grid Alive
A central concern for observers has been Eskom’s reliance on diesel-fired open-cycle gas turbines during the crisis period. At its peak, diesel burn reached extraordinary levels, exposing the utility to volatile fuel markets and raising questions about fiscal sustainability and procurement risk. That reliance has fallen sharply. Diesel usage has declined steadily since mid-2025, with periods of zero diesel burn recorded during stable operating weeks. Coal remains the backbone of South Africa’s electricity generation fleet, supplemented by renewables and residual emergency capacity.
From a procurement perspective, this hybrid energy model carries both risk and opportunity. Fuel sourcing, coal logistics, plant maintenance, grid services, and independent power procurement all continue to expose Eskom, and by extension, the South African economy, to international suppliers and cross-border supply chains. Electricity tariffs remain high by global standards, reflecting the true cost of recovery, legacy inefficiencies, and debt servicing obligations. Yet tariff stability, even at elevated levels, is preferable to unpredictability. For procurement teams and investors alike, price certainty matters more than headline price alone.
Eskom’s debt burden remains substantial. Government intervention through debt relief measures and structural reforms, including the unbundling of generation, transmission, and distribution functions, has begun to reshape the utility’s financial architecture. Whether this ultimately resolves Eskom’s balance sheet challenges remains an open question, but the direction of travel is clear, towards transparency, ring-fenced accountability, and market-facing procurement practices.
Economic Signals: Fuel, Markets, and Minerals
Beyond electricity, several macroeconomic indicators reinforce the view that South Africa enters 2026 on firmer footing than many expected. Fuel prices have fallen to their lowest levels in several years. This reflects a combination of global oil oversupply, softer international refined product prices, and relative currency stability. Lower fuel costs feed directly into transport, agriculture, and manufacturing inputs, easing inflationary pressure across supply chains.
The Johannesburg Stock Exchange has reached levels not seen in two decades. This performance has been driven less by speculative exuberance than by strong commodity earnings, improved investor confidence, and a recalibration of risk following energy stabilisation. Minerals have played a decisive role. Gold, platinum group metals, and critical minerals continue to trade at elevated prices amid global demand linked to energy transition technologies and industrial hedging. For South Africa, a major producer, this represents a material export advantage. The resulting foreign currency inflows support fiscal stability and reinforce the country’s role in strategic global supply chains.
Importantly, mining output is more reliable when electricity supply is stable. This feedback loop, power stability enabling production and production supporting growth, underscores why the retreat of load shedding carries macroeconomic significance beyond the energy sector itself.
Business Confidence and the Return of Operational Normality
At a business level, uninterrupted electricity has restored something intangible but critical, confidence. Companies that had deferred expansion, postponed hiring, or limited capital investment are reassessing their plans. Productivity gains are emerging not from innovation alone, but from the simple ability to operate continuously. Other factors have contributed to this stabilisation. Private sector infrastructure investment has increased, logistics performance at key ports has improved, and firms have adopted technology to optimise operations and reduce exposure to future shocks. None of these developments are revolutionary in isolation, but together they signal a return to operational normality.
From a procurement standpoint, this matters. Supplier reliability improves when operations are stable. Contract performance risk declines. Lead times shorten. South Africa becomes a more predictable node in international sourcing strategies.
External Funding, Global Capital, and Procurement Exposure
Concerns around reductions in certain international aid flows, particularly from the United States, have attracted attention. In practice, the economic impact has been limited. South Africa’s growth drivers are increasingly market-led rather than aid-dependent.
At the same time, investment from China and other partners continues, particularly in infrastructure, energy, and logistics. These capital flows carry procurement implications of their own, from equipment sourcing and EPC contracts to financing structures and long-term supply agreements that cross jurisdictions and regulatory regimes.
Eskom itself remains embedded in international procurement networks. While coal procurement is largely domestic, pricing and logistics are influenced by global markets. Diesel and oil inputs are internationally sourced, either directly or through refined imports. These dynamics reinforce South Africa’s integration into global supply chains.
Why This Matters for International Procurement
For procurement professionals, South Africa’s economic outlook for 2026 is not a geopolitical story, but a commercial one. A stabilised energy environment reduces supplier risk. Strong commodity markets influence global pricing. Infrastructure recovery creates procurement demand. Improved confidence attracts investment and competition.
South Africa is not an outlier. It is a reminder that infrastructure reliability underpins procurement resilience. Energy security is not merely a policy objective, but a supply-chain enabler. As global buyers reassess sourcing strategies in an era defined by resilience, sustainability, and diversification, South Africa’s experience offers a valuable case study. It demonstrates how systemic risk can recede without fanfare, and how procurement outcomes improve when operational fundamentals are restored.
Looking Ahead
South Africa’s challenges are not resolved, but the tone has shifted. The economy enters 2026 with momentum rather than apology. For procurement leaders, this shift invites a reassessment of supplier confidence, regional exposure, and where future opportunities may lie.
Sometimes the most meaningful change is not dramatic reform, but the return of reliability. In procurement, that is often the difference between managing risk and unlocking value.
This article is informed by publicly available energy system data and international market analysis relevant to procurement and supply chain risk.
Background Reading and Additional Sources:
Eskom
Power system stability, Energy Availability Factor (EAF), diesel usage, surplus capacity, illegal connections and infrastructure crime (2025–2026):
https://www.eskom.co.za/eskoms-power-system-remains-stable-recording-year-on-year-gains-with-the-energy-availability-factor-remaining-on-an-upward-trend-and-unplanned-outages-down-to-6-171mw/
https://www.eskom.co.za/eskoms-power-system-remains-stable-with-105-consecutive-days-without-loadshedding-and-an-energy-availability-factor-eaf-ranging-between-64-and-75/
https://www.eskom.co.za/theft-and-vandalism-of-eskoms-infrastructure-remain-a-major-threat-to-continuous-electricity-supply-and-public-safety/
https://www.eskom.co.za/continued-execution-of-turnaround-plan-drives-eskom-groups-profitability-and-sustainability-profit-after-tax-increases-to-r24-3-billion-unaudited-in-first-six-months-of-fy2026-to-be-reinv/
South African Government
Energy Action Plan (EAP) progress report:
https://www.gov.za/sites/default/files/progress_on_EAP.pdf.pdf
Eskom debt and financial position, The Presidency:
https://www.thepresidency.gov.za/node/9414
Council for Scientific and Industrial Research (CSIR)
Long-term load shedding trends and economic impact (referenced in national reporting).
South African Reserve Bank
Estimates on economic cost of load shedding and productivity losses (referenced in national reporting).
South African Police Service (SAPS)
Enforcement actions against organised crime and infrastructure sabotage at Eskom (referenced via Eskom and media briefings).
Daily Investor
Eskom turnaround, leadership reforms and sabotage analysis:
https://dailyinvestor.com/energy/96211/the-truth-behind-how-eskom-went-from-zero-to-hero/
https://dailyinvestor.com/energy/103356/truth-about-the-end-of-eskom-sabotage/
BusinessTech
Electricity price comparisons and Eskom tariff increases:
https://businesstech.co.za/news/energy/839380/south-africas-electricity-prices-vs-the-united-states-russia-and-china/
https://businesstech.co.za/news/business-opinion/840346/south-africans-say-goodbye-to-eskom/
Daily Maverick
Illegal connections, fines, prosecutions and prepaid meter reforms:
https://www.dailymaverick.co.za/article/2025-01-10-eskom-to-get-tough-on-illegal-connections-with-fines-and-prosecution-for-offenders/
Department of Mineral Resources and Energy
Fuel price adjustments and underlying drivers:
https://www.gov.za/news/media-statements/minister-gwede-mantashe-announces-adjustment-fuel-prices-effective-6-0
Reuters
Precious metals markets, rand performance and macroeconomic context:
https://www.reuters.com
Business Day
JSE performance, mining sector rally and market capitalisation:
https://www.businessday.co.za/markets/2025-12-31-jse-closes-with-biggest-gain-in-20-years-as-gold-and-platinum-stocks-fly/
Daily Investor (Markets)
JSE valuation and global comparison:
https://dailyinvestor.com/investing/115353/south-africas-jse-is-shooting-the-lights-out
