71% of SA Businesses Affected by Load Shedding
Most businesses have had to incur additional costs to run generators while businesses without this advantage have had to shut down their doors for the duration of load shedding periods.
71% of South African businesses affected by load shedding in 2022 as the country experienced one of the worst periods of load shedding, which totalled 205 days of power outages.
Before then, there had been brief periods of power outages, but the majority of 2022 was a “dark period” for the country, and this had huge ramifications for the economy, which had also been badly affected by the Covid-19 pandemic.
In one of its reports, The Sowetan listed several businesses that had either been hamstrung or had succumbed to the effects of load shedding showing its devastating impacts on the country’s economy.
Businesses, like many industries in the country, have had to adjust to the difficulties that have been brought about by incessant power outages. Production is affected as electricity is at the heart of businesses’ day-to-day activities.
In some instances, businesses have reported payment issues as some speed points are affected by poor network connections. Most businesses have had to incur additional costs to run generators while businesses without this advantage have had to shut down their doors for the duration of load shedding periods.
Stella Ndabeni-Abrahams, who is the Minister of Small Business Development, recently lamented the impacts that load shedding has, stating that the country cannot continue to lose citizens’ livelihoods. To assist businesses the minister alluded to the fact that her ministry is working towards finding solutions to assist small businesses that might not have the financial strength to weather the load shedding storm.
In conjunction with the Small Enterprise Finance Agency (SEFA), the Ministry of Small Business Development noted the challenges small businesses have faced through a survey. From this survey it was noted that most businesses are highly dependent on electricity for operations, 71% of businesses have negatively been affected by load shedding, and most businesses require alternative power sources for operations.
Another sector that has been affected by load shedding is South Africa’s water sector. Due to constant load shedding, many areas within Johannesburg have had to cope with severe water shortages.
South Africa’s water sector challenges have been widely reported and load shedding has exacerbated them. The water infrastructure, for instance, is dilapidated and aged.
That, coupled with power cuts, has resulted in challenges with the pumping of water from reservoirs into households. The overall process of water being transported from reservoirs into households is heavily reliant on electricity, leading to water shortages in many households in areas such as Johannesburg and Nelson Mandela Bay.
As with many countries, energy and water are intertwined thus meaning regular power cuts are a bad omen for water governance in the country.
President Cyril Ramaphosa has on many occasions throughout the country’s power crisis outlined measures to address the challenges the country’s power utility – Eskom – has faced over the past few years.
In his first weekly letter of the year, Ramaphosa noted that the country needed to be “realistic” in its approach to addressing load shedding which he acknowledged had affected sectors such as agriculture, health, education, and the judiciary.
In his communication, the president noted that there were no “quick fixes” and that he would want lasting solutions to the challenges at hand.
One of Ramaphosa’s biggest challenges since assuming the presidency has been the state of Eskom. The power utility has often blamed breakdowns at power stations for being one of the chief contributors to the load shedding, which it also noted would be a recurring theme in the country for the next two years.
In June of 2022, Ramaphosa established the National Energy Crisis Committee (NECOM) to establish solutions to the power crisis the country has faced. In its progress report, one of the suggestions by Necom is the importation of an external 300MW from Southern African Power with negotiations to secure 1000MW from neighbouring countries starting this year.
Although this is a realistic approach, the southern African region faces an energy situation that has affected countries like Zambia and Zimbabwe, where load shedding is also prominent.
NECOM has also recommended a team of independent experts to work with Eskom to improve the plant performance and diagnose problems at poorly functioning power stations in the country. Independent experts would go a long way in assisting the power utility to find lasting solutions to the power challenges that the country continues to grapple with.
One of the debates towards finding a solution to the power cuts in South Africa has been the shift to alternative forms of energy such as solar energy and wind energy.
Large businesses and corporations, factories, mines, and some households have gone “off the grid” to do away with reliance on Eskom’s services, however, this has done little to alleviate the pressure on Eskom.
Alternative forms of energy, as mooted by experts, are a step in the right direction in addressing power outages. However, for a country where there is a massive gap between the rich and poor, wealthier sections of society will likely be able to purchase alternative forms of energy while the rest of the population will still be at the mercy of the ailing power utility. It is, therefore, important for the government to adopt a stance that will find a lasting solution to load shedding in the country.
South Africa’s power utility has been plagued by governance issues both internally and externally. This, many would argue, is at the heart of the challenge the country faces with electricity.
The Governance Institute states that governance is “the system by which an organisation is controlled and operates and the mechanisms by which it, and its people, are held to account.”
This definition sums up the issues in Eskom and the country at large and it is only through addressing this governance deficit that load shedding can be a thing of South Africa’s past.
Gwinyai Regis Taruvinga is a Postdoctoral Research Fellow at the Wits Humanities Graduate Centre
