Crippling impact of load shedding on township economy, small business

Eskom loadshedding Stage 2 South Africa

In an eye wakening report 60% of small businesses in townships stop operations as a result of load shedding while 66% and counting continue to shed jobs in an attempt to stay alive.

This is according to a new research report survey conducted by Nedbank alongside the Township Entrepreneurs Alliance (TEA) where a survey across the country determined a paralyzing reality of the load-shedding impact on Small, Medium and Micro Enterprises in the township economy.

Hanging on by a thread

With more than R900 billion estimated value in 2021, the township market which is a mix of formal and informal business accounts for some of the country’s revenue.

The set economy employs over 2.6 million people in a variety of sectors ranging from retail, manufacturing, gas, livestock, distribution and even franchising.

The crystalized findings show that not only is the so called township economy under threat but over 60% of small businesses stop operating completely during load shedding, which on average is over four hours.

Job cuts

Businesses are shedding jobs, with increasing operational costs, lost revenue and declining margins wreaking havoc on an industry that can barely make ends meet.

The survey highlighted that while solar power was a preferred alternative for recurring blackouts, the cost including knowledge appeared to be out of reach for the day-to-day small business owner in the township

The research report also highlights that small business continues to lose revenue only to accumulate new overheads such as the cost of fuel for a generator.

Mental illness, including a slow decline in business numbers which cannot survive has been identified as the un intended impact.

Falling business margins

More than 200 businesses have been surveyed and the impact shows declining business margins at a rapid rate.

With challenges ranging from rescheduling appointments, delayed orders, hours without power, to increased production costs. losses in fresh produce and tarnished baking mixtures, the electricity debate has been necessitated according to Nedbank, Tea and a panel of industry professionals.

Township small business owners said they have not put any measures in place to address the increasing impact of load shedding, due to a pricy entry level to alternative power.

The research report, tabled by speakers Lizzy Mogale, Managing Executive, Insights and Advisory at Nedbank
Bulelani Balabala, Founder of TEA, Dayalan Govender, Managing Executive: Solution Innovation at Nedbank, Franc Gray, Chief Lending Officer at Hohm Energy alongside Energy economist Lungile Mashele highlighted some of the necessary discussion coupled with actions to help remedy the unshakable crises at hand.

Also read: What Shifted in Email Marketing Since We Went ‘Back to Normal’?



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