Engineering News: SMEs must be considered in loadshedding solutions independent of their affiliation

The small and medium-sized business (SME) ecosystem must be included in designing solutions to support them against the effects of loadshedding, and the help must be universal and available to SMEs that are not clients of government agencies like the Small Enterprise Development Agency and the Small Enterprise Finance Agency and the other development finance institutions, says SME organisation Small Business Institute (SBI) CEO John Dludlu.

“The SBI is calling on government to provide speedy, effective and tailored support to struggling SMEs, which are being decimated by the new and unending round of loadshedding.

“The Department of Small Business Development announced that it was considering relief measures to assist SMEs affected by loadshedding. We commend the department for seeking first to understand the unique problem faced by the SME segment of the economy, including the fact that, unlike large business, it does not have the luxury of immediately getting off the grid,” he adds.

The lesson from Covid-19 is that jointly developed solutions have a better-than-average chance of succeeding compared with those solutions unilaterally designed for a system that remains poorly understood, he emphasises.

“We have to applaud private sector players in the SME ecosystem who have already developed products enabling SMEs to lessen loadshedding’s impact. Therefore, government doesn’t have to reinvent the wheel in this regard. Instead, it has to enter into private-public partnerships with the early movers,” he suggests.

“Loadshedding, which has worsened in the past year to date, has been a feature for many years. Our expectation is that the Finance Minister Enoch Godongwana will use his budget statement next month to announce government’s quantum of support to SMEs alongside the debt relief he plans to give to Eskom over its R400 billion-odd debt. It also has to be borne in mind that the current high interest rate environment aimed at fighting inflation is not conducive for more loan finance instruments,” Dludlu says.

“We welcome the announcement by the Small Business Development Minister Stella Ndabeni-Abrahams that government, through her department, will be looking at relief measures for SMEs. This is long overdue. Even though it is late, it is better than nothing while we are watching thousands of SMEs shedding jobs and closing shop.”

Further, Dludlu applauded the media’s role in quantifying and explaining the scale of the adverse impact on SME owners of loadshedding. The media has done exceedingly well in putting faces to the victims of loadshedding, be they business owners, their workers and their families, he says.

“In terms of numbers, we will see the next set of liquidations and unemployment numbers tell the full extent of the humanitarian and business impact of loadshedding,” he adds.

Additionally, praise should be given to the large businesses that have provided working spaces to their small suppliers during this crisis.

“The SBI is calling on government and [State-owned power utility] Eskom to take the rest of the South African public into its confidence about the progress, or otherwise, it is making in the energy crisis plan, including the impact of the latest clampdown on the criminal element by the army,” Dludlu exhorts.

by Engineering News –

Schalk Burger