Small, medium and micro enterprises (SMMEs) are suffering amid escalating power outages and their plight will be worsened by the latest electricity price hike.
This is the view of NPO Midrand Local Economic Empowerment (MLEE), representing more than 300 SMMEs.
Members are from industries such as construction, catering, food, restaurants, events management, security, ICT, engineering consultancy & manufacturing and funeral parlours.
“Tariff price increases have a direct impact on operational costs in this tough economy. SMMEs are drowning with the 75 basis points rate hike by the Reserve Bank in December, petrol and diesel increases, the economic downturn and now the power tariff price increase,” said MLEE secretary-general Lisa Tele.
On Thursday Nersa approved a revenue application of R318bn for Eskom for the 2023/2024 financial year and R352bn for 2024/2025.
Eskom’s application was for R351bn for 2023/2024 and R381bn for 2024/2025.
The increase for 2023/2024 translated to 173.08c per kWh and a percentage increase of 18.65%. The increase for 2024/2025 translated to 195c per kWh and 12.74%.
Tele urged the small businesses department to accelerate business funding models and relief grants to cushion the impact.
“Government must intervene to phase these hikes appropriately to align with its unemployment and economic growth initiatives,” she said.
Load-shedding has affected small businesses and most MLEE members are moving to alternative power supplies such as solar or fuel-powered generators.
“Small businesses are directly affected by [stage] 6 load-shedding because power cuts at times take away more than eight hours during the day, which is the average working hours.
“A small business will either have to spend more than R300 per day on fuel [for generators] or close down. That is a day’s profits of a small business, all lost to operating costs.”
Businesses such as bakeries, restaurants and food sellers are directly affected as they need to keep food fresh for their customers.
“Businesses such as internet cafés, printing shops, engineering manufacturing and funeral parlours are also affected. Mobile data connection is constantly down during load-shedding because of battery theft at the towers,” she said.
Small businesses that cannot afford alternative power sources are forced to retrench employees to survive or close down as happened during the pandemic lockdowns.
“Small businesses in the MLEE membership need a business subsidy to buy generators or solar and inverters as most do not have the capital. Many SMMEs cannot afford the costs of migrating to solar power as it demands capital, which is a big challenge, especially during the recovery phases after the pandemic,” she said.
Source: TimesLIVE
