The consensus amongst small business owners and chambers of commerce is that the continued load-shedding and Eskom’s proposed tariff hikes for next year will sound the death knell for many SMMEs. The utility announced that it plans to apply a 32% tariff increase to solve its R200 billion debt. Small business owners and the National Union of Municipal Chambers of Commerce and Industry believe that not only is the tariff hike unreasonable, but in the face of the already crippling load-shedding, it will kill many small businesses.
Simphiwe Nkula, who runs Emerald Metering & Utility Management which installs smart meters and does electricity readings for municipalities, told Vutivi News that load-shedding has resulted in his business bleeding R70,000 in profit in under a week.
He said that in the past two months, he lost around R200,000 in profits due to the consistent load-shedding. He is also losing money by paying his workers salaries for work they cannot do thanks to the rolling power cuts. “I have to pay my team in Richards Bay for their accommodation, and it’s essentially for nothing,” he said. “My employees work three out of the eight hours they must work, and load-shedding makes it difficult to plan our day and month, and we don’t even know when this will end.”
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Nkula said that renewable energy was the alternative solution to the power crisis. He said that if the issue was not resolved soon, he may lose his employees, contracts, and his business. Fundiswa Gxoyiya, who owns the clothing company BlackFura, said that load-shedding had forced her to retrench some of her employees and if the tariff was hiked and the power cuts continued, her business might not make it.
Ironically, while she was speaking to Vutivi News, she suddenly experienced her second bout of load-shedding for the day. “I missed my deadlines and because of this, I lost clients and this is because I don’t have a backup power source,” she said. “As a result, I cannot take as many orders as I normally do, and this has forced me to let go of two of my staff members until the load-shedding ceases.”
Gxoyiya said that if the 32% tariff hike was imposed, her profits would be used to pay her electricity bill, and this would end her business and deprive her employees of their livelihoods. NUMCCI president Albert Jeleni warned that the rolling blackouts had caused widespread panic in the business community and that the proposed hike was unsustainable and would not solve Eskom’s debt.
“In the age, we live in, electricity is necessary for most small businesses, and such a hike would render small businesses unprofitable,” he told Vutivi News. “It’s really going to hang small businesses.” Jeleni also said that the panic within the business community was caused by uncertainty. And this had serious consequences.
“At some point businesses were told that they would not experience load-shedding, and they panic because they are not sure whether Eskom’s management and leadership are aware of the root cause of the problem,” he said. “Investors looking to invest in South African businesses are skeptical, and as a result, SMMEs will suffer the loss of new opportunities derived from these investments,” Jeleni said that the solution was for Eskom to give clarity on the real issues behind its problems, and how long it would take to fix them.
