In South Africa, ‘load shedding’ takes a toll on small businesses

Cape Town, South Africa – In the five years since Corner Cafe opened its doors a few metres away from the South African Parliament building in Cape Town’s central business district, it has become a popular meeting place for politicians, researchers and other locals.

But less than two years after the COVID-19 pandemic flattened business in the area and led to many closing shops, Prisca Horonga, the cafe’s owner, who works up to 12 hours and employs three people, says it is facing another existential crisis.

Since 2022, there have been scheduled blackouts, or load shedding, across the country for as long as 10 hours per day at a time.

“You have to wait until the power returns … we cannot afford a generator, so we lose clients all the time,” 32-year-old Horonga, originally from Zimbabwe, told Al Jazeera.

In the same district, beautician Nadine Iqani, who has been in operation for the past 15 years, has similar worries. In the past decade, she has managed to juggle her schedule to accommodate clients despite the blackouts, but she says things have worsened in the last year.

“I am making a third of the income pre-the load shedding times, and I have clients shouting at me,” she told Al Jazeera. “It is just a nightmare … working long hours, including weekends, to accommodate clients.”

Now, Iqani is considering saving for an inverter battery system.

Many small business owners like her and Horonga say they are close to buckling under the pressure of the crippling power cuts.

Some are already warning that there will be job losses as the power cuts continue, and that could have a ripple effect in Africa’s most industrialised economy. South African small businesses, often seen as the lifeblood of the economy, account for a third of the country’s gross domestic product (GDP).

South Africa depends on coal for 80 percent of its energy needs. But since 2008, national utility company Eskom, which supplies more than 90 percent of the country’s electricity, has been implementing load shedding as demand outpaces supply.

Power cuts have now increased from only a couple of hours a day at the beginning to Eskom’s “Stage 6” – as much as half a day – in the last year, as it tries to protect the country’s grid from total collapse.

Analysts say underinvestment in the maintenance of ageing coal plants for years has affected Eskom’s capacity to deliver consistent power supply to millions of households. Some of the newer power plants have also broken down due to overburdening.

Additionally, Eskom, whose debt now stands at approximately 400 billion rands ($22.6bn) according to the country’s treasury department, has also had to deal with worker strikes in the past year.

Counting the cost

All of this has had a trickle-down effect on people, many say.

“The escalating electricity crisis is causing untold devastation across all social and business activities in the country,” wrote the influential Black Business Council (BBC) in a paper released this month.

Earlier this month, at the annual Mining Indaba event in Cape Town, Gwede Mantashe, minister of mineral resources and energy, told the industry that the power cuts cost the economy 1 billion rands ($56m) per day.

Indeed, the World Bank estimates that Africa’s most industrialised economy lost $24bn in 2022 because of power cuts.

Workers say the load shedding has worsened living conditions.

Almost half of the country is unemployed and the country is already battling with an external debt of $130bn and an economy struggling to emerge from recession.

There have already been protests in recent months in the commercial capital, Johannesburg, as power cuts continue to stoke anger and frustration nationwide.

Sizwe Pamla, spokesperson of the Congress of South African Trade Unions (COSATU), the country’s largest group of labour unions, told Al Jazeera that President Cyril Ramaphosa and his African National Congress (ANC) have only 15 months to convince people that they deserve a second chance.

“The economy cannot grow, and unemployment cannot be reduced with continuous load shedding,” Pamla said. “The government needs to ensure Eskom has all the resources and authority at hand to reduce load shedding.”

‘A dramatic response’

In December, embattled Eskom CEO Andre de Ruyter – the 13th since 2008, when power cuts started – tendered his resignation from the utility. A month later, Ramaphosa cancelled his trip to the World Economic Forum to deal with the energy crisis and meet the utility’s leaders.

In an address to the nation in February, the president said: “load shedding is more than an inconvenience, it is more than a disruption, it is a threat to the progress of our country and the development of its people.”

He is expected to mention possible solutions for the ailing power sector in a state of the nation address on Thursday.

South Africans say they are hoping the address will have concrete solutions as neither the government nor the Eskom leadership has done so. Some have called for an overhaul of the utility and its top brass.

“One solution that can permanently deal with load shedding is to fix Eskom as soon as possible,” Kganki Matabane, BBC’s CEO, told Al Jazeera, saying other proposed solutions like utilising independent power producers and solar energy were like “putting a bandage on a broken arm”.

“In South Africa, we have an installed capacity of 47,000MW … but we are only using 26,000MW at the peak,” he added. “So it’s like you have a house with four rooms, but you can only use one room. So for us, the easiest solution is to first fix the rooms in the house. We want the government to put all its efforts into fixing Eskom, we believe we can reduce the load shedding from Stage 6 to Stage 4.”

A National Energy Crisis Committee set up last year by Ramaphosa is working on new legislation to “allow energy projects to proceed more quickly and enable coordinated and decisive action”.

In November, South Africa, one of the world’s largest greenhouse gas emitters, was given $497m in financing from the World Bank to accelerate the decommissioning of one of its largest coal-fired power plants and convert it to a renewable energy source.

And while that has fuelled hope, it may not be enough, businesspeople say.

“It has become apparent that the magnitude of the power crisis requires a dramatic response if the country has to return to stability,” the BBC said.

In the interim, small business owners wait for their fortunes to change, saying they have to keep the lights on despite the difficulties of doing so.

“I am not feeling very optimistic that the power situation will change at all,” Horonga told Al Jazeera. “I am not convinced by the promises.”