Load shedding crippling small business
SMALL business owners are bearing the brunt of load shedding, the cost of which has exceeded an estimated R1.2trillion in South Africa.
Jeremy Lang, the chief investment officer at Business Partners Limited, a small to medium-sized enterprise (SME) financier, said the financial impact has been shouldered by thousands of small businesses, considered the backbone of the economy.
“Their profits are declining and they cannot afford backup systems like inverters or generators,” he said.
For Mala Manikam, 47, from Westcliff in Chatsworth, this reality hit home when she had to close her tuck shop because her fridge and freezer, that stored her stock, blew up due to load shedding.
Manikam said she opened the tuck shop about 12 years ago out of a wendy house on her property.
“My husband who is a mechanic was not getting enough jobs. I tried to get a job but nothing was coming my way. Things were so tough that I would ask my neighbours for help and I realised I could not go on like this. I had my last R50 and I decided to buy some sweets, chips and cigarettes and start selling. My business boomed within months. I used the income to pay my rent, my utility bills, buy food and put my children through school.”
She said a few months ago everything came crashing down.
“I had a fridge and a freezer to store my stock and after load shedding, I believe the power surge blew them up. We tried to repair it but nothing worked. I had no choice but to close the tuck shop. It is hard because now it’s only my husband’s income and he does not get jobs so often. We are just taking each day as it comes. Load shedding is destroying small businesses. Jobs are so hard to get in South Africa and people like me are trying to make an honest living but load shedding is taking this away from us.”
Manikam said the government should be subsidising inverters or generators for small businesses.
“We are an important part of the economy.”
Sahima Mahomed, 38, a seamstress, runs her business from her home in Grove End, Phoenix. She has had to turn down orders because of load shedding.
“I started my business about two years ago during the Covid-19 pandemic. My husband had to take a salary cut because of Covid and with less income in our home, I had to do something to assist him. I started doing alterations and then I moved on to sewing dresses for little girls. Through word of mouth and social media, my business grew and I gained more customers.”
Mahomed, a mother of two, said while her business was growing she was hit with a challenge – the constant load shedding.
“I tried to do my sewing from the morning until 2pm when my kids get back from school. At this point in the day, I help with homework and I make supper. Once that is done I get back to my work in the evening.
“The load shedding has made it difficult to work. I had to recently turn down an order from a restaurant for 50 shirts because I knew with the load shedding I could have not been able to get the order out on time.”
She said when there was load shedding she was unable to use her sewing machine. “Using a light I try to cut up the fabric so it’s ready for sewing. It is not easy because the cutting is intricate and I cannot afford for it to go wrong. The power surge after load shedding caused my machine to blow up. I am using my mom’s. It is hard because we need to make a living. I looked at the prices of inverters and right now I cannot afford it.”
Mahomed said the government needed to help.
“If my mom did not have a machine what would I have done? I cannot buy a new one or repair the old one. The government does not realise how load shedding impacts small businesses. We are not like the bigger retail stores or businesses that have backups. We work with what we have. They need to help us get access to inverters and things that can help our business.”
Ashthika Lutchman, 22, runs a nail bar from La Lucia in Durban.
She started her business at the age of 14 in Phoenix.
“I have been no stranger to load shedding. From the time I started, I have been affected. I recently got a business partner and we opened a shop in La Lucia. Apart from doing nails, we do hair and massages. Since load shedding started I have tried to keep the business stable. I remember I used to use cellphone power banks to keep the lamps for nails running. We recently invested in a few inverters to we can carry on with business but it is not enough.”
Lutchman said they have had to turn down customers because of load shedding.
“The inverters cannot power up all the equipment we need. We cannot even work later hours because our staff take public transport and also have families at home. It is a loss for everyone and small businesses are bearing the brunt of load shedding.”
Lang said the cost of load shedding in South Africa had exceeded an estimated R1.2 trillion – notwithstanding the losses accumulated during the current financial year.
He said some of this financial impact had been shouldered by the thousands of small businesses which were the backbone of the economy.
Lang said the disproportionate effect that load shedding had had on micro-enterprises and those in the informal sector was evidence of the pressing issue of economic inequality.
“Many of the corner shops, tailors, shisanyamas and local fruit and vegetable sellers, who have become such an important part of the South African SMME landscape, are not in a position to afford expensive generators, inverters and alternative energy sources. This has placed many of our local business owners under immense stress and job shedding has become a very real fear.”
He said, going forward, local small businesses would have to adopt an agile mindset and approach to change.
“These are unprecedented times for the South African socio-economic climate, with emerging challenges that present a whole new set of threats to business continuity, and by extension, employee well-being. Small businesses can no longer afford not to invest in contingency plans that can help them stay afloat amid the energy crisis. We are aware that load shedding will persist into the indefinite future.
“As such, small businesses need to find creative ways to maintain their employee value proposition by offering flexibility and structured arrangements to recover lost working hours. Now is also the ideal time to invest in health and well-being – providing support for employees and building positive team culture should be regarded as a business imperative.”
He said the energy crisis was undoubtedly one of the biggest contributing factors to the course of the local working landscape’s evolution.
“In the very near future, the way
these businesses respond to the mounting pressures will determine the longterm sustainability of the sector and its people.”
Prasheen Maharaj, president of the Durban Chamber of Commerce and Industry, said the lack of electricity was affecting small businesses.
He was speaking during a recent twoday eThekwini Energy Transformation Summit, when he said the situation was getting worse, with record levels of
load shedding experienced in 2022 – 207 days of blackouts, compared to 75 days in 2021.
“They (small businesses) do not have the options and measures in place to withstand the impact of load shedding. The reality is that many SMMEs cannot afford to source alternative energy solutions such as generators, inverters, UPS devices, and battery energy storage supply systems which can help them mitigate the impact of load shedding.”