Outages hit business in the gut, local study finds
As the rolling load-shedding was devastating businesses throughout the country, the Nelson Mandela Bay Business Chamber moved swiftly to undertake a survey of businesses that make up our membership to assess the economic impact.
It is important for all businesses to become members of the business chamber, as the collective voice of business is much more effective.
The business chamber is representative of a broad spectrum of businesses in Nelson Mandela Bay.
It is one of the largest business associations in the Eastern Cape, with a membership of more than 700 businesses employing more than 100,000 people in a diverse array of sectors.
The business chamber is a leading catalyst for economic development and investment promotion across sectors.
This work is done through its strategic quadruple helix model of collaboration between industry, academia, government and civil society, which serves as the foundation for creating a competitive Nelson Mandela Bay.
Unsurprisingly, the survey confirmed what was clear to begin with: that the load-shedding had a negative impact on businesses.
The most shocking was the realisation that even the government at the highest level was caught by surprise and did not seem ready.
This does not bode well for the economy of the country.
Some of the important findings from the research project are shared herein.
From a broad-based survey across our membership, we found that nine of out every 10 businesses surveyed were negatively impacted by the loadshedding this year.
This confirms not only the concerning anecdotes and headlines we’ve seen recently, but also the severity of the electricity problem.
Load-shedding has been harmful, and could continue to have a negative impact on economic development and investment promotion.
Besides damaging equipment, reducing output and sales, rolling blackouts have also negatively affected our business community in a number of other terrible ways:
● 81% of businesses surveyed considered their customer service or client relationships to be negatively impacted by load-shedding;
● 47% of businesses considered the quality of their products and services to be negatively impacted;
● 32% of businesses considered the cost or price of their products/services to be negatively impacted; and
● 19% of businesses considered their brands to be negatively impacted.
Further to this, almost 40% of businesses are unsure whether they can adapt to load-shedding with minimal longterm impact on their performance and viability.
The short-term outlook across local business is not optimistic either: nine out of every 10 businesses surveyed think that it is unlikely that the country's load-shedding troubles will improve in the next 12 months.
As we reflect on each of these dismal facts, we must all bear in mind that, for obvious reasons, the negative effects of load-shedding are likely to be even harder on businesses across the board.
Challenges highlighted are limiting the ability of our local business sector to trade competitively, or attract the investment and talent needed to sustain growth and create new jobs.
Focusing just on the last part of this statement, our study found that four out of every 10 businesses considered their capacity to create employment to be negatively impacted by load-shedding.
While workforce productivity is doubtlessly an issue across all SA cities, this should be particularly concerning to us as the metro with the worst unemployment rate in the country.
It is again deeply concerning that only one in every two businesses surveyed considered themselves prepared for the load-shedding already experienced this year.
Collectively as a city, we must once again and habitually ask ourselves: how can we help our businesses to be better prepared to deal with this crisis, particularly when 38% of our businesses acknowledge that they could or should have planned better.
Does the current system ensure the best footing for us to reach our local business goals and our city’s developmental objectives?
The business chamber continues its progressive engagement with the Nelson Mandela Bay metro to minimise the negative impact on the business sector, as well as the community.
Every alternative or proposal should be considered, with no intention to marginalise any one side, but rather to view the local economy holistically and offer the best solutions to keep building our city as a great place to live, work and seek opportunity.
The current temporary reprieve on load-shedding gives us a brief opportunity to rethink our city’s medium- and long-term energy future.
Our current challenges are deeply entrenched, and need to be handled with urgency and attention.
The business chamber’s electricity task team has come up with proposals which will be tabled to the metro’s management in a quest for long term solutions for the Bay.
Let’s become the city renowned for showing resilience and innovation in the face of a crisis.