Load shedding another blow for Covid-hit SMMEs
Durban – AS if the ravages of Covid-19 and a depressed economy are not enough, struggling small businesses are now being dealt another blow due to blackouts and the prospect of higher electricity tariffs.
According to business chambers and an economist, small, medium and micro enterprises (SMMEs) will battle to survive as blackouts disruptions are expected to continue into next year.
Eskom spokesperson Sikonathi Mantshantsha said yesterday the power utility, which implemented stage 4 load shedding on Wednesday, was battling multiple breakdowns in a number of its generation units, and demand had increased due to the cold weather.
Mantshantsha said the blackouts would persist at the weekend as their staff worked to return generation units to service.
Emerging business owner Vukile Ndimande of Black Orphan Clothing, a manufacturing and printing business, said he didn’t have back-up power and had to put operations on hold during the blackouts.
“I have tons of orders that I need to do and this stop-and-go is delaying the process,” said Ndimande. He said the power outages had hit his business hard as it had not generated any income for months.
“I’m doing what I can to keep the business going, but the load shedding is adding pressure,” he said.
Durban Chamber of Commerce and Industry chief executive, Palesa Phili, said SMMEs were the worst affected by the blackouts.
“Furthermore, it limits access to the internet, which, in a connected world, would be devastating, particularly on e-commerce which is the great hope of SMMEs.”
Phili said the blackouts would also severely affect crucial sectors, resulting in a loss of productivity that would inevitably lead to revenue losses, job insecurity and contracted economic growth prospects.
Melanie Veness, head of the Pietermaritzburg and Midlands Chamber of Business, said it was inconceivablebusiness should have to endure the outages just as the economy was starting to gear up again.
“Quite frankly, it’s devastating. I feel absolutely desperate for our struggling enterprises, many of whom won’t make it if load shedding persists,” she said, adding this would obviously cause job cuts. “We’re trying to win a huge battle with our hands tied behind our backs. Far more established economies are struggling to reboot post-Covid-19, how on earth are we expected to do that with a disrupted power supply?” she asked.
Efficient Group economist Dawie Roodt said it was going to be hard for small businesses to survive over the next two years as more electricity interruptions were expected.
Roodt said based on his projections of economic growth, the economy would definitely go into a depression of minus 10%.
“People must not think that the country’s economy is going to bounce back after the lockdown, it’s not, and that is just the reality. There is a huge drag on the South African economy.”
According to Roodt, Eskom’s total outstanding debt stood at nearly R500 billion.
“We have also noted that Eskom wants to increase their prices by 25%, and that will have a huge impact on the income statement of struggling businesses. Even at this stage, businesses are not generating any profit as they are still making up for months of non-operations while still having to pay staff,” he added.