LETTER : Economy could be crippled by load-shedding
NORTHERNNATALCOURIER / 23 OCTOBER 2019 - 15.55 / OTTO B KUNENE
“Electricity is a prerequisite for proper functioning of nearly all sub-sectors of the economy…”
Sir – The IFP is gravely concerned that Eskom’s decision to resume Stage 2 load-shedding will negatively affect Small, Medium and Micro-sized Enterprises (SMMEs).
Eskom has announced that Stage 2 load-shedding will be implemented from 9am to 11pm on Wednesday due to a ‘shortage of capacity’. It has since been indicated the blackouts are expected to last at least a week.
Electricity is a prerequisite for proper functioning of nearly all sub-sectors of the economy. We are of the view that this development will lead to further economic deterioration, and it is sad this is happening at a time when we should be making all efforts to find ways and means to resuscitate the ailing economy. The biggest casualties when this happens will be the SMMEs, whose businesses are highly dependent on a steady supply of electricity. This is because they do not have capacity to easily use other sources of energy, for example generators, as compared to big businesses.
Load-shedding affects business operations and financial viability. An immediate consequence of this will be a reduction in productivity in these businesses, which will further result in even slower economic growth in the province, given the significant role played by small businesses in job creation and income generation. In addition, the expected loss of business due to load-shedding will most likely push the business to consider laying off some workers as a way of mitigating the effects of load shedding.
The commencement of load-shedding will therefore disturb efforts which were made to economic recovery. The KwaZulu-Natal business sector, both formal and informal, has not been spared and has been crippled and hit hard by electricity load-shedding, which Eskom sees as a solution to meet the demand.
Businesses and entrepreneurs rely on electricity in order to grow the economy. It is therefore critical to understand the extent to which load-shedding has affected this sector and how this can affect the KZN’s economic development. The energy deficit the country faces needs concerted efforts to address because it has caused major challenges on the local economy.
Another way SMMEs’ productivity can be impacted is in terms of their machinery, as some machines can take some time to start up. The IFP regrets the load-shedding which has been introduced by Eskom and cautions the government that if load-shedding is to continue, it will have a devastating effect on the economy of our province and our country.
Otto B. Kunene MPL – IFP KZN Spokesperson on Economic Development
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER