Load shedding damages biz

2015-06-23 06:00

Load shedding is bad for business, according to a recent survey conducted by advisory and tax firm BDO.

“A reduction in service lev­els, an increase in operating costs, a negative impact on competitiveness and turnover and poor customer experience are all symptoms being experienced by Western Cape businesses who are having to cope with regular load shedding during business hours,” says BDO’s communications manager Genea Frade.

Some 98% of Western Cape respondents to the survey reported that the uncertainty about the future of electricity supply in South Africa impacts negatively on investor perceptions of the country.

In addition, 76% said that load shedding had a negative effect on their operating costs, with 83% reporting that their service delivery was negatively impacted in varying degrees.

A further 69% of respondents said that overall they felt their company’s competitiveness was affected by load shedding.

This is enhanced by the IMD’s 2015 world competitiveness rankings in which South Africa fell one place to 53rd out of 61 countries as government and business efficiency deteriorated.

IMD World Competitiveness Centre director Prof Arturo Bris said South Africa’s challenges included deteriorating education and high youth unemployment, corruption, lack of capacity in electricity generation and distribution, and an insufficient supply of skilled engineers and technicians.

“We had noticed the effect that load shedding was having on our own business and were curious to see the impact it had on our clients’ businesses,” says Antonie van der Hoek, managing partner for BDO Cape Town.

“For this reason we conducted this survey which saw 400 BDO clients being surveyed across four regions. Some 64% of the respondents have smaller businesses with under 100 employees – showing how detrimental the power cuts are to the growth and success of SMEs and SA entrepreneurs”.

“In a country where we are already struggling to attract foreign direct investment, load shedding further detracts from our competitiveness. We need to start investing in alternatives in order to keep the lights on, businesses operating smoothly and potential investors confident in our country,” said Van der Hoek.

Interesting to note is that over 60% of Western Cape respondents feel it is time to start look­ing at alternative solutions and the majority are interested in exploring renewable energy options to counteract the effects of Eskom’s power cuts.

The above research was conducted from 25 March to 6 April

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