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< What the Big Mac index says about the value of the rand
Economics Main Page >

South Africa's electricity, gas and water supply industry

Category: ESKOM and electricity​
Date: 9 July 2018

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In this article we take a look at the report published by Statistics South Africa covering the electricity, gas and water supply industry in detail, for the year 2016. Interesting facts and figures regarding this relatively small industry in South Africa's economy is to follow. 

This industry makes up roughly 2.1% of South Africa's total economy. So it is a very very small part of South Africa's economy but in terms of importance water and electricity is the life blood of any country's economy.
Picture
  • ​Rand Dollar Exchange Rate
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So which sector within Electricity, gas and water supply is the biggest?

The table below shows the income generated by the various sectors within this industry for 2006, 2010, 2013 and 2016. And as the table shows, the industry is totally dominated by the electricity generation, transmission and its distribution with it making up 83.2% of total income earned by the industry in 2016. Manufacturing and distribution of gaseous fuels made up 4.9% of income earned by this industry in 2016, while collection, purification and distribution of water made up 11.9% of income earned by this industry in 2016.
Picture
In 2016 this industry earned a total income of R241 973 000 000 or R241.9 billion. In 2006 this amount totalled R58.99 billion. It just shows the strong growth in income earned over the last 10 years. But it has to be noted inflation is included in the numbers above. So income is one thing, but do the companies operating in these industries actually earn a profit? The table below shows the net profit/loss, turnover and profit margins earned in 2006, 2010,2013 and 2016.
Picture
The net profit margins earned in 2016 is shown below:
  • Generation, transmission and distribution of electricity: 2.4%
  • Manufacturing and distribution of gaseous fuels through mains: 28.3%
  • Collection, purification and distribution of water: 16.3%
So while electricity generation and distribution makes up the majority of income earned during 2016, it had paper thin net profit margins of just 2.4% in 2016, while manufacturing and distribution of gas had a net profit margin of 28.3% and water collection, purification and distribution earned a net profit margin of 16.3%. Giving the overall industry a net profit margin of 5.2% (weighed down heavily by the sheer size of the electricity sector).

So how many people are employed in this industry? The table below takes a look at the number of employees in  each of the sectors within this industry.
Picture
The industry as a whole employed 59 029 people in 2016, with the majority of them, 46 287  or  78.4% being employed in the generation, transmission and distribution of electricity industry

Worryingly is the fact that the number of employees employed in the electricity sector has grown at a rate strongly outpacing the other sectors within the industry over the last 10 years. Part of ESKOM's problems currently is their bloated work force, and with the workforce in the sector growing by over 14 000 in just 10 years, its no surprise that market commentators are suggesting ESKOM needs to shed a  large number of jobs in order to continue as a going concern and to remain a sustainable business.
The summary below shows the total increase in the number of employees as well as the percentage growth over the last 10 years. 
  • Generation, transmission and distribution of electricity: 14 297 (44.7%) 
  • Manufacturing and distribution of gaseous fuels through mains:  112 (36%)
  • Collection, purification and distribution of water: 2 503 (25.5%)​
​
So now that we know how many employees works in the industry and the various sectors within the industry, what is the gender breakdown of these employees? The graphic below shows the gender ratio per sector within the industry.
Picture
As the image above shows the industry and the sectors within this industry is dominated by males, with only 31.9% of all employees in the industry being female. The highest proportions of females (32.4%) is employed in the electricity sector, while only 27.4% of people employed in the manufacturing and distribution of gaseous fuels are female.

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