Township business owners say they’re struggling to stay afloat amid constant and crippling rolling blackouts.
This is according to a Nedbank insights report conducted in partnership with the Township Entrepreneurs Alliance (TEA) titled “Impact of load-shedding on small businesses in the township economy”, which surveyed over 200 businesses across South Africa.
The intent of the survey was to quantify the impact of load-shedding on small businesses in township communities, unpack the drivers behind the impact and finally draw insights to help develop alternate solutions.
The key findings were as follows:. 64% of township small businesses cease operations during outages.. Almost 66% of business owners have shed jobs because of blackouts.. Load-shedding has led to increased operating costs, lost revenue and declining margins, therefore affecting profitability.. Solar is the most preferred alternative energy option (although generators are the most used), but most businesses don’t know where or how to start looking for this solution.. Business challenges caused by power cuts are having an impact on mental health, resilience and the entrepreneurial ability to hustle.
The findings were discussed by a panel that was facilitated by Lungile Mashele, Energy Economist.
While the survey revealed that more than 60% of township small businesses cease operations during load-shedding, it also showed the resilience of small businesses in the township, with 19% turning to alternative energy sources and 17% improvising in other ways. Generators were the most prevalent alternative energy source but, although cheaper than an equivalent battery backup, the cost to run them can be quite high depending on load-shedding intensity.
“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 and require a response from both the private and public sectors,” said Dayalan Govender, Nedbank Managing Executive Solution Innovation.
Speaking around the finding that almost 66% of the respondents stated that they had been forced to shed jobs as a result of load-shedding, Lizzy Mogale, Managing Executive: Insights and Advisory at Nedbank Retail and Business Banking, highlighted the following: “In the food and beverages as well as manufacturing sectors, 83% of business owners reduced staff count; in agriculture, 76% of businesses and in IT services, 70% of business owners mentioned that they had to let go of some of their staff. On average, only 29% had no staff loses, while 5% of these businesses were permanently closed.”
