The writer says even a few days of load shedding often has far-reaching implications that small businesses can feel for months if not years. Photo: Reuters The writer says even a few days of load shedding often has far-reaching implications that small businesses can feel for months if not years. Photo: Reuters
JOHANNESBURG – Much has been written about Eskom’s most recent load shedding schedule. Its impact is all-pervasive on business, hospitals, clinics, essential services, traffic, education and on all of us in our homes.
But the most critical area of our economy that is bearing the brunt of successive days of an interrupted power supply is our small, medium and macro enterprise (SMME) sector. These small and medium businesses are the engines of growth and job creation in our country, and if their productivity is stymied, so is the greater economy.
Even a few days of load shedding often has far-reaching implications that small businesses can feel for months if not years.
Most big businesses are equipped to deal with outages and can afford alternative power sources such as generators. For many industries in the manufacturing sector, having machinery or furnaces power down during outages is not an option, and so, according to the Manufacturing Circle’s Philippa Rodseth, our manufacturers have learnt to be resilient (although that is not to say they are not hurting as well).
But even as productivity and profitability are hampered by load shedding, expenditure and consumption continue without interruption. Wages, rents and other overheads have to be paid. People still want to buy what you're making and will therefore look elsewhere for the same product or service if you can’t meet demand.
For businesses such as hair salons, laundromats, small grocers and bakeries, for example, clients may just travel a little further to an establishment in an area that is not experiencing load shedding where their needs will be fulfilled. Some small businesses may never recover from this, and jobs will be lost.
Many middle-sized businesses which cannot afford generators also have to ride out the outages and suspend production. In addition to the risk of damage to machinery from the constant switching on and off, and from power surges, they may suffer reputational damage as they are unable to make deadlines and meet orders.
Their customers, since they are all in the same boat and suffering as a result of the years of mismanagement at Eskom, may be unsympathetic and will look elsewhere for the fulfilment of an order.
This of course opens the door for importers to replace locally made items whose supply line has become unreliable and unpredictable. When businesses close, jobs and skills are lost, and these, together with the infrastructure, migth never be recovered.
The deplorable state of Eskom is messing with the entire country’s future and is threatening any green-shoots recovery we might have begun to see (for example, a small drop in the unemployment figures was announced last week).
Without a reliable electricity supply, we become unreliable and therefore uncompetitive. In this case, for sure there will be someone willing to step in and supply what we need, whatever it is, wherever it comes from and at whatever price.
We simply can't afford to let this happen. We have to nurture our local manufacturing sector and our local SMMEs if we are to make any progress as a country, and a country without electricity can't do this.
In the words of the extremely talented Sabelo Mthembu, who I am delighted to see has just resurfaced on M-Net’s The Voice South Africa, Angiphili Mawungekho, which loosely translated means “without you, I am dead”, local businesses, without electricity, will similarly perish.
Eustace Mashimbye is the chief executive of Proudly South African. The views expressed here are his own.