Small businesses remain optimistic despite loadshedding and Transnet woes

ToBeConfirmed

ToBeConfirmed

Published Dec 25, 2023

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The small business sector in South African remains “cautiously optimistic” as we close out the year and head into 2024.

According to Jeremy Lang, the Chief Investment Officer at Business Partners Limited said many small business owners are looking to recover losses experienced during and as a result of the pandemic years.

The energy crisis has also been put a damper on these more positive prospects of small businesses and consequently entrepreneurs have had to find new ways to mitigate the effects of loadshedding on their operations.

Another issues has been the logistical troubles that has developed due to the Transnet infrastructure failure at our ports.

“The challenge with the movement of goods out of the Durban and Richards Bay ports has added another stress for small and medium enterprises (SMEs) in the retail, import and export industries,” Lang noted.

The most recent survey conducted by the Entrepreneurs' Organisation (EO) South Africa chapter, found that loadshedding caused financial losses for six out of 10 businesses (58.7%).

The quarterly SME Confidence Index found that for the majority of local small businesses, loadshedding caused major business disruption, with only a few of these ventures having a contingency plan in place to manage the financial implications.

“Apart from disrupting the flow of operations, the ongoing energy crisis has had a far-reaching impact on the small business sector. Our own research has also shown that crime is now among the top five challenges faced by small businesses – a situation that is exacerbated by rolling blackouts.”

Lang said that loadshedding has also made electronic systems more vulnerable to damage caused by power outages and surges.

“The reality is that any forthcoming solutions to loadshedding will take at least a few more years to bear fruit. With this in mind, business owners need to review their funding options and find ways to acquire back-up energy infrastructure and tighten up their risk mitigation policies to prevent unnecessary insurance claims and irrecoverable damage to machinery and equipment.”

HUMAN RIGHTS

Loadshedding is undermining our human rights, according to to National Union of Metalworkers of South Africa (NUMSA)

In an interview with SABC News, NUMSA spokesperson Phakamile Hlubi-Majola said that the impact of load shedding undermines all South African’s basic rights.

Moreover he notes that load shedding has cost the economy and SA thousands of jobs and has devastated businesses.

The union is one of many organisations that have taken government to court over load shedding .

Hlubi-Majola said: “We argued that the rolling blackouts were undermining the fundamental rights enshrined in the Constitution - where the state has a duty to provide education, access to healthcare, and guarantee safety”.

“The fact that we have these daily constant blackouts, also known as load-shedding, means that those rights are being undermined.”

Earlier this month the courts ruled that NUMSA and the other stakeholders had a point and that load shedding did violate South African human rights.

According to the Outlier, there has been 6947 hours of loading shedding so far this year.

The organisation also noted that SA had 205 days in 2022 of load shedding.

HOPE

Electricity Minister Kgosientsho Ramokgopa said in mid December that he is confident that there will be no load shedding in the next two weeks as South Africans enjoy the festive season.

Ramokgopa was speaking during a briefing on the implementation of the Energy Action Plan (EAP) last week.

He said the outlook over the festive period was upbeat.

“I’m confident that we’ll have a festive season with the lights on, not the candle … we will have the proper lights to make sure we usher in 2024,” he concluded.

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