SBI calls on government to save SMEs from devastating loadshedding
January 20 2023
The Small Business Institute, which represents tens of thousands of small businesses, is calling on government to provide speedy, effective and tailored support to struggling small and medium-sized enterprises (SMEs) which are being decimated by the new and unending round of loadshedding.
On Tuesday night, the department of small business development announced that it was considering relief measures to assist SMEs affected by loadshedding.
“We welcome the announcement by the minister of small business development Stella Ndabeni-Abrahams, MP, that government – through her department – will be looking at relief measures for SMEs. This is long overdue. Even though late, it is better than nothing whilst watching thousands of SMEs shedding jobs and closing shop,” says the SBI CEO John Dludlu.
“We commend the department for seeking to first understand the unique problem faced by the SME segment of the economy, including the fact that unlike large business it has no luxury of immediately getting off the grid. Accordingly, we beseech government to include the SME ecosystem in designing solutions. Importantly, the help must be universal and be also available to SMEs that aren’t clients of government agencies like SEDA and SEFA and the other DFIs,” he adds.
The lesson from Covid-19 is that jointly developed solutions have a better-than-average chance of succeeding than those unilaterally designed for a system that remains poorly understood.
“We have to applaud private sector players in the SME ecosystem who have already developed products enabling SMEs to lessen loadshedding’s impact,” Dludlu says, “so government doesn’t have to reinvent the wheel in this regard. Instead it has to enter into private-public partnerships with the early movers.”
Loadshedding – which has worsened in the past year to date – has been a feature for many years. “Our expectation is that the minister of finance, Enoch Godongwana, uses 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,” he says.
Dludlu also applauds the media’s role in quantifying and explaining the scale of the adverse impact on SME owners from loadshedding. “The media has done exceedingly well in putting faces to the victims of loadshedding – be they business owners, their workers and their families. In numbers’ terms, we will see the next set of liquidations and unemployment numbers tell the full extent of the humanitarian and business impact of loadshedding,” he says.
Similarly, 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 Eskom to take the rest of South African public into its confidence about the progress or otherwise it is making in the energy crisis plan including the latest clampdown on the criminal element by the army.
Notes to editors: the government statement is available on our website and here: