Load shedding in South Africa has been a persistent challenge for businesses, but a new report has highlighted the devastating impact of power cuts on township enterprises. The study reveals that load shedding has not only led to the loss of revenue for these businesses but also resulted in job shedding. The findings underscore the enormous toll that electricity disruptions have on South Africa’s economy, particularly on small and emerging businesses. In this article, we will examine the key findings of the report and shed light on the plight of township businesses grappling with power shortages.
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Township businesses have been forced to shed jobs because of load shedding.
- Around 66% of township businesses have cut jobs due to load shedding, a report has found.
- More than 60% are unable to operate during power outages.
- The restrictions on operations are affecting livelihoods, business owners have argued.
A new report has found that almost two-thirds of township businesses have been forced to cut jobs due to load shedding. However, many business owners believe the situation is even more severe as ongoing power outages threaten to force them to close their doors entirely. The Nedbank Insights Report, conducted in partnership with the Township Entrepreneurs Alliance (TEA), indicates that during load shedding, 64% of small township businesses cease operations entirely and nearly 66% have cut jobs due to load shedding, with the food and beverage and manufacturing sectors being hit the hardest.
The report also highlights increased operating costs, lost revenue, and falling margins. Some businesses have turned to alternative energy sources, but others are incurring the additional cost of purchasing generators or face closure. Power outages also lead to increased crime, often causing further declines in business viability.
Sandile Sangweni, spokesperson for the Kwamashu Business Chamber, has stated that the impact of load shedding varies between sectors, with those providing food services being the hardest hit. “It’s the shisanyamas, the corner shops, and the butcheries that are struggling because they stock perishable items that need cold storage. Power outages mean they can’t prepare food or store it. They end up having to throw away stock, and they lose money when they can’t serve clients. In the end, businesses are having to incur the extra cost of a generator or close their doors,” he said.
Further analysis of the report shows that the challenges caused by power cuts are impacting entrepreneurs’ mental health and resilience. Chris Paladi, a former restaurant owner from Alexandra, had to close his business and retrench two employees due to load shedding impacting peak trading times. “It was not workable for us, and it was no longer feasible. We relied on an oven, and the oven needed power. We had stoves that operated on gas which could work during load shedding, but we still needed the oven,” he said. Following the closure of his restaurant and loss of employment, he is in debt to the landlord of the restaurant property.
The ongoing impact of load shedding is also discouraging new entrepreneurs, and Dayalan Govender, Nedbank managing executive for solution innovation, has called for a response from both the private and public sectors. “Given that spaza shops contribute around 6% of South Africa’s GDP, employ 2.6 million people, and represent an economy of around R600 million, the results are troubling,” he said.
In conclusion, the devastating effects of load shedding on South African businesses, particularly those in townships, cannot be overlooked. As this report highlights, the loss of income, decreased productivity, and job shedding continue to take a toll on the already vulnerable economy. It is imperative for the government and stakeholders to work towards finding lasting solutions to this issue and ensuring the survival and growth of township businesses. Until then, township entrepreneurs and job seekers remain at the mercy of unpredictable and disruptive power cuts.
