Happy Monday,

Today we discuss how South Africa's electricity crisis is affecting businesses, particularly small businesses. The guest author explains the challenges caused by frequent power outages, and discusses the impact on various businesses.

Business vs Eskom

We are beginning to mimic a broken record with the same discourse, year in year out. That discourse being how businesses have been and are being affected by our country’s electricity crisis. However, much has changed from the previous years. We are now in a state of emergency because of the electricity crisis which has resulted in the emergence of new precautions, and an addition to the Cabinet of South Africa. The institution of the Minister of Electricity catalysed a national debate, and the following questions have been top of mind for many. What does this mean for businesses? Are there any new regulations to help entrepreneurs and business owners? Do small businesses have any special provisions to help them survive? Would it be a good idea to start a business right now?

The reality of the matter is that South Africa is facing an energy crisis, and there is little to nothing that we, ordinary citizens, can do about it. According to the State of the Nation Address (SONA) the regulations that are put in place are there to “assist, provide protection and relief to the public; protect property; prevent and combat disruption; and to deal with the destructive nature and other effects of the disaster” - the disaster being the energy crisis. Our President went on to further say that the regulations are to minimise the impact of loadshedding on livelihoods, the economy, and numerous other functions that are affected by loadshedding on a large scale.

Through a survey by the Ministry of Small Business Development, 71% of businesses have been negatively affected by loadshedding, with most requiring alternative power solutions to keep their doors open. In January 2022 120 businesses were liquidated, and in January 2023 the number went down by 32.5% to 81 businesses closing down. Economists at Absa have stated that as much as the numbers may seem positive the liquidation data is a lagging indicator and could rise in the coming months. The Minister of Small Business Development, Stella Ndabeni-Abrahams, has said herself that the country cannot continue to witness the loss of livelihoods due to loadshedding, and that her Ministry is working towards finding solutions that will assist small businesses which may not have the financial strength of big corporations to survive loadshedding.

Interestingly, big corporations are also facing financial setbacks due to loadshedding. Tiger Brands reported that the Stage 8 blackouts set them back R120 million in order to generate energy to keep the business above water. Pick n Pay expenses R60 million per month for diesel generators and Shoprite R90 million per month for the same reason. It is clear that loadshedding is an issue that is faced by both small and big businesses. The caveat is that small businesses are the ones that get buried under the sand.

Does this mean that dreams of venturing into business must be flushed down the drain? Absolutely not! The world of entrepreneurship is a risky and tiresome one, however with the right tools, knowledge and assistance can keep start-ups afloat. Payment solutions company, iKhokha, other companies, and news articles provide entrepreneurs with advice and tips to solve the problems that they face on a daily. For example, business owners can find information on alternative power solutions, backing up data, unplugging relevant equipment during loadshedding etc.

Not all hope is lost. Entrepreneurs still remain the burning hope for economic liberation in this country - not only for the entrepreneurs themselves, but for the people they hire, the communities they uplift, and the national economy that they bring up. It may be difficult, it may be exhausting, and it may seem hopeless but it is vital for entrepreneurs to keep at it and keep the end goal in mind, and businesses will soar above this era of loadshedding.

Helpful Links

Ikhokha: Loadshedding Survival Tips

Simply: 5 Small Business Load Shedding Strategies

Cover: Small business survival in an age of load shedding

BVSA: Survival Tips For Small Businesses

IOL: Small businesses can beat rising fuel prices and load shedding

Get To Know The Author

Nkosinathi Mtumbula, ABSIP Wits Entrepreneurship Director

Nkosinathi Mtumbula is a second-year law student at Wits University who is actively shaping a promising future. His strong commitment to social justice is evident through his nationally and internationally published writings on crucial topics. Nkosinathi's leadership extends to various student roles, including positions within ABSIP Wits and the Black Lawyers Association Wits Subcommittee. He recently gained practical experience through a student program at BBM Law, showcasing his proactive approach to merging theory with real-world practice. Balancing academics, leadership, and external engagement, Nkosinathi's passion for progress positions him as an up-and-coming notable figure in law and advocacy, with a future brimming with positive impact.

LinkedIn

Nkosinathi’s Favourite Quote

🤪 Fun Fact: I am a published writer, published by the University of Pretoria, the South African Schools Debating Board, and the CSA&G, writing on matters of Gender-based violence, Sexualities, Race and Gender

📚 Favourite Book: Coconut by Kopano Matlwa

Thanks for reading!

All the best,

Hlumelo Lujiva💙

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