'It has a ripple effect': Load shedding bringing Cape Town's township businesses to their knees

play article
Subscribers can listen to this article
The effects of load shedding on small businesses are felt beyond the hours of darkness.
The effects of load shedding on small businesses are felt beyond the hours of darkness.
Photo by Gallo Images/Fani Mahuntsi
  • Small business owners fear they may have to close shop if load shedding continues.
  • Many township businesses have already suffered losses due to power interruptions.
  • The outages are undermining efforts to grow the economy and create jobs, the Cape Chamber of Commerce and Industry says.

Small business owners in Cape Town’s townships are feeling the effects of load shedding, beyond the hours of darkness.

The lost revenue has seen businesses forced to close branches and retrench staff, as they struggle to keep revenue coming in amid stage 6 load shedding, local business forums say.

Khayelitsha Business Forum's Mzee Kutta said that many township businesses were feeling the financial effects of the hours lost due to load shedding.

He added that, although businesses make less money when the lights go off, they are still expected to pay the same rent, and this places strain on smaller businesses.

Kutta has been personally affected by the load shedding. He owns a number of laundries and has had to close one of the branches.

He said:

There is a lot of uncertainty. People can't work so they have less money. Because of the impact of load shedding, people are being asked not to go to work or are retrenched.

Fellow business owner Agnes Mayeki says her construction company has potentially lost out on tenders because she has not been able to submit documentation on time.

"It affects us a lot. We can’t do anything. We can’t print or do quotations. It’s especially bad when we have dates on which we have to submit documents for tenders, but there is no electricity," she said.

Along with losing out on business, Mayeki says her staff have also felt the pinch because they are not able to work their usual hours.

READ | TAKE A LOOK: How SA's worst year of load shedding played out

Langa Business Forum's Siseko Mngxali says load shedding has significantly impacted businesses across all sectors.

"For instance, some of our members own sports bars where people come to watch TV. But due to the load shedding, their TVs are damaged, and their fridges have broken. There’s no one to pay them back for it. And if it’s load shedding, people won’t come to the sports bar."

He added that food vendors were also severely affected, with their stock going off when their fridges lost power.

'Enormously disruptive'

"For a small business that relies on fridges, the load shedding has a very negative impact. If their stock goes off, no one compensates them for the loss," Mngxali said.

He said that some businesses may be forced to close due to losses brought on by load shedding, adding:

This means a loss in revenue for our community. Township businesses are interconnected and are supplied by other businesses in the area. If a shisanyama closes, the supermarket it bought meat from will be affected. There’s a domino effect.

Gugulethu Business Forum's Mlugnisi Mazana said small businesses were more likely to be affected by the power outages than larger companies, especially if they were not able to operate.

"The operating time lost to load shedding heavily impacts on a small business owner’s income. It has a ripple effect, with businesses forced to shed jobs," said Mazana.

He added that aspiring business owners were likely to be discouraged when witnessing the effects of load shedding on businesses in their community.

"People look up to small and medium enterprise owners and may hope to follow suit one day. But they will decide to put the brakes on their dreams if they see businesses closing down, not understanding that a major contributor to that is load shedding."

READ | Rolling blackouts: The dark reality facing small business owners battling to stay aloft

Cape Chamber of Commerce and Industry president Jacques Moolman said load shedding was "enormously disruptive to the economy and the society at large".

"Small business is particularly affected, which undermines the government’s mandate to grow the economy and create jobs. In particular, it undermines key job-creation sectors such as the hospitality sector, with micro-enterprises hardest hit because they often lack the resources to afford contingency plans such as generator backup power," he said.

City of Cape Town Mayco Member for Economic Growth James Vos said load shedding "comes at a huge cost to businesses", with many forced to "divert finances from necessities such as hiring more staff towards buying equipment that will keep the lights on and machines running".

"The City of Cape Town is currently the only municipality able to limit load shedding in its supply areas by building up reserves garnered from the well-maintained Steenbras Hydro Pumped Storage Scheme," he said.

"The current situation again illustrates how necessary it is for Cape Town to further reduce its reliance on Eskom as soon as possible. Much work is already under way as it pertains to the City's own build, small-scale embedded generation, wheeling and independent power producer programmes."

Never miss a story. Choose from our range of newsletters to get the news you want delivered straight to your inbox.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Show Comments ()
Voting Booth
What do you think about the SA government investigating Chinese online fashion retailer Shein over its business practices?
Please select an option Oops! Something went wrong, please try again later.
It’s a waste of resources that should go to local trade
30% - 1396 votes
I think Shein is being unfairly targeted
10% - 463 votes
Dig up the dirt! We must look out for SA retailers
43% - 2021 votes
I don’t mind, as long as the customer doesn’t suffer
18% - 829 votes
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.