For many years, South Africa grappled with an energy crisis that jeopardized its economic stability. This crisis came to an end in March 2024, attributed to several factors, including a leadership change at Eskom, the state-owned power utility. However, according to Gwede Mantashe, the Minister of Minerals and Petroleum Resources, the continually rising energy demands necessitate new solutions.
Speaking at the Africa Oil Week in Cape Town on Tuesday, Mantashe stated that the country could experience economic growth of up to 8% if the petroleum sector is developed independently.
“Energy is the driving force that will enable South Africa to achieve its goals as we continue to secure energy supply and combat energy poverty. A diversified energy mix is essential for our nation to meet its increasing energy demands,” he emphasized.
He explained that developing oil resources could elevate the annual GDP growth rate to 5% and potentially reach 8%. Preliminary assessments indicate that substantial oil deposits recently found off Namibia’s coast extend into South Africa’s economic zone, prompting Mantashe to advocate for an expedited search for offshore oil in the Atlantic Ocean.
“The department has created an upstream petroleum resource development bill, which has been approved by both houses of parliament and is awaiting presidential signature. This bill is crucial as it positions petroleum as an independent sector of the economy, rather than just an extension of mining,” he added.
Mantashe highlighted the importance of oil and gas in advancing the country’s economy, which currently relies heavily on coal. In late September, President Ramaphosa announced the establishment of the South African National Petroleum Company (SANPC), formed by merging several existing national energy entities and assets. The SANPC aims to enhance the development of the nation’s oil and energy sector, according to the president.
