Pretoria - Eskom’s ongoing load shedding is crippling the City of Tshwane’s economy with the mining industry and manufacturing sector in the metro recording wage losses per hour of at least R1.5 million and R15.7m, respectively.
This grim picture of the local economy was based on calculations made by the City’s team focusing on the hourly wage loss on different economic sectors in the municipality.
The team estimated the cost of load shedding on Tshwane’s economy and concluded it was devastating for all businesses.
Part of the calculations found the local agriculture sector was losing more than R314 000 per hour while the construction sector lost R4.1m.
The retail industry was the hardest hit with R8.1m wage losses every hour. The severe impact on retail was attributed to lack of the luxury of implementing load shedding mitigation measures.
MMC for Economic Development and Spatial Planning André le Roux slammed the power utility for the ongoing load shedding, saying it was severely impacting the metro’s local economy.
Le Roux expressed deep concern about the rolling blackouts as a result of the implementation of stage 6 by the power utility.
He said: “The ongoing higher levels of load shedding have a devastating impact on Tshwane’s economy, particularly our small, medium and micro enterprises sector (SMMEs).”
Reflecting on the rolling blackouts’ impact on the retail sector, he said: “It is in this sector where many SMMEs are feeling the devastating impact of load shedding with many being forced to close their doors. The concern is that overall, the economy bleeds approximately R1 billion in real wages per hour of load shedding. The gross domestic product (GDP) is another important measurement to calculate the economic impact that load shedding has on the economy of a city.”
He added the total GDP loss per hour for Gauteng was R461m, of which Tshwane lost R132.7m per hour because of load shedding.
Among the serious impact on businesses, Le Roux said, was loss of production due to machinery in many plants taking up to three hours to heat up and one hour to start after power had been restored.
“With load-shedding at Stage 6, many industrialists are losing 100% of their daily productive output. With no production, personnel are sent home, in many cases without pay,” he said.
He said companies were beginning to lose contracts and orders, particularly export contracts as a result of load shedding.
“The impact of this is excess plant capacity, employment cuts and, in extreme cases, company liquidations. The frequency of load shedding has led to industrialists deferring new investments and expansions, with a negative impact on employment and trade,” Le Roux said.
There were also increases in theft and burglary incidents during load shedding which lead to an increase in insurance and security costs, he said.
“In a week of Stage 6 load shedding, the country loses 0.3% of its GDP. The disruption of supply value chains reduces downstream economic opportunities for SMMEs that are already greatly impacted,” Le Roux said.
Pretoria News