Load shedding Crisis Forces Businesses to Close in Cape Town

The load shedding crisis in South Africa has claimed yet another victim as a fast-food business owner based in the central Karoo resorts to selling his business to cut losses. Due to the crippling effects of load shedding, the 41-year-old restaurant owner said it was impossible to keep the business running without power. Pizza and chicken are the main meals for his business, and without electricity, they are unable to bake and struggle to fry their chips, leading to a loss of revenue. The building has since been advertised online.

Dr Willie Cilliers, the chairperson of the George Business Chamber, said similar cases are emerging in the Garden Route, adding that the impact of load shedding, coupled with the minimum wage increase, has affected business owners. He said many companies are deciding to close down, and he expects the numbers to increase heading into the winter months.

According to a recent report by Nedbank, the load shedding crisis is hitting small businesses in the township economy hard. In the food and beverages and manufacturing sectors, 83% of business owners reduced their staff count, while 70% had to let go of some of their staff in IT. On average, only 29% had no staff loses, while 5% of the businesses surveyed had to shut down permanently.

Nedbank Managing Executive Solution Innovation, Dayalan Govender, said that given that spaza shops contribute around 6% of South Africa’s GDP, employ 2.6 million people and represent an economy of around R600 million, the results are troubling and require a response from both the private and public sectors.

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The impact on the manufacturing and construction sectors has been the most significant, and the sad part is that there will be job losses. The load shedding crisis is forcing many small businesses to cut losses, leading to a decrease in productivity and revenue loss.

The load shedding crisis is an issue that requires urgent intervention to prevent more businesses from closing down. The private and public sectors need to work together towards finding a sustainable solution to this critical issue that is affecting the economy and the livelihoods of millions of people.