South Africa’s business owners fume as power cuts hit profits

South Africans’ annoyance at power cuts has given way to worry, with business owners complaining that the prolonged energy crisis for which no end is in sight is eating into profits and hobbling economic activity.

At Native Rebels, a colourful second-floor bar flanked with a large balcony in the Johannesburg township of Soweto, the cost of running a generator to keep lights on for weeks has been a huge burden, co-owner Masechaba Nonyane told AFP.

“We thought Covid was bad... now that has been replaced with eight hours of no power,” the 33-year-old entrepreneur said. 

“It’s been really, really crippling,” she added.

Scheduled blackouts, known locally as load shedding, have burdened the country for years but recently reached new extremes.

This month, the country has endured almost two weeks of stage-6 load shedding, which entails multiple power cuts a day, each lasting between two and four hours.

Each of the up to eight stages of load shedding costs the country’s economy an additional R500 million (US$29 million) a day in lost activity, according to government estimates.

The crisis was exacerbated by a labour dispute at monopoly power provider Eskom’s coal plants.

The dispute was resolved earlier this month as Eskom agreed to a pay raise for its striking workers –- but power cuts have yet to significantly abate.

Load shedding = job shedding

“Load shedding will lead to further job losses, which will lead to lower production. It will affect spending. It will further affect economic growth,” said Ismail Fasanya, senior lecturer of economics at the University of the Witwatersrand.

Firms have had to spend money on generators, raising the cost of running a business –- something that risks dissuading local entrepreneurs looking to start new ventures as well as foreign investors, said Fasanya.

The impact on jobs is particularly worrying in a country grappling with 34.5 percent unemployment in the wake of the coronavirus pandemic, he said.