Industry organisation the Small Business Institute (SBI) has called for President Cyril Ramaphosa to place the plight of small businesses' owners and employees and households at the centre of his State of the Nation Address (SoNA) on February 9.
“We ask the President to provide urgent relief to struggling small businesses that are affected by the rising cost of capital and crippling loadshedding,” says SBI CEO John Dludlu.
Similarly, households are going through hardship because of loadshedding. The SBI looks forward to details about how government will cushion households and small businesses from the 18% tariff increase granted to State-owned power utility Eskom by the National Energy Regulator of South Africa, he says.
“Small businesses and households, which cannot afford to immediately get off the national grid, have been the worst affected. We are inundated daily by small business owners who are suffering from the devastating impact of loadshedding.
“We ask the President to direct relevant organs of State to accelerate relief measures for small and medium-sized enterprises (SMEs) affected by loadshedding,” he says.
Although South Africa’s SMEs are resilient, the past few years have been especially tough, including the Covid-19 pandemic, floods in KwaZulu-Natal and the Eastern Cape and the July 2021 riots in KwaZulu-Natal and Gauteng.
“These events came on top of long-standing, underlying conditions, such as late payments to SME suppliers, red tape and low economic growth. The segment has hardly recovered, and now has to cope with rolling power outages and rising interest rates, which is unbearable.
“We ask the President to instruct all the departments that owe small suppliers to settle these debts at once, as this could alleviate severe cash flow problems suffered by business owners,” Dludlu says.
Small businesses are also suffering from the effects of failing State-owned enterprises and are caught up in fights between organs of State, such as Eskom and non-paying municipalities. SMEs are not in a position to litigate out of these fights, he emphasises.
“Last year, the President announced measures to help SMEs bounce back quickly from Covid-19. While welcomed, the environment in which this scheme was introduced has significantly changed, namely that loadshedding has escalated and interest rates have been rising rapidly to contain inflation.
"This requires that we tweak and rethink the relief measures and design new ones to deal specifically with loadshedding,” he suggests.