More pain as the economic impact of loadshedding increases

There seems to be significant movement in South Africa to compel Government to get more serious about finding a resolution to the ongoing energy crisis. The Democratic Alliance marched to the ANCs headquarters on 25 January, and the EFF is planning a national shutdown with will take place on 20 March. If you believe EFF leader, Julius Malema, the shutdown will make the July 2022 unrest seem like Mickey Mouse (sic).

The economic impact of loadshedding has been well documented and various high level experts within the business rescue industry believe that we will be in for another year of heavy financial distress if Government doesn’t resolve the energy crisis soon.

There are now pleas from around the country for Government assistance.

Generators please

An article by EWN points out that the Energy Crisis Movement has called on the Government to immediately subsidise businesses with generators, especially those in the food production sector in order to protect food security.

The movement, describing itself as a civil organisation said it was fed up with the national rolling blackouts and the possibility of a complete breakdown of the energy grid.

The article adds that the Energy Crisis Movement said that Government was to blame and that measures needed to be put in place to prevent load shedding from further impacting South Africans, particularly the poor.

Generators would help protect food security, prevent the increase in food prices and prevent further job losses in the industry, the movement said in a statement.

The article adds that the Energy Crisis Movement is demanding that the Department of Trade and Industry and the Department of Small Business prioritise this as a matter of urgency.

An economic driver calls for action

A key driver of the South African economy is the sugar industry. The plight of this industry has already been highlighted by the Tongaat Hulett business rescue with calls for a speedy resolution to the issue not far from everyone’s lips. The Cane Growers Association has also asked Government to consider scraping the sugar tax in an effort to offer some relief.

The association is now imploring Government to address the loadshedding situation.

The EWN article points out that the association said the industry is set to lose close to R800 million this year as a result of the rolling power cuts.

The agriculture sector has been struggling over the last few months following the intensified rolling blackouts, with concerns that this might increase food prices.

The article adds that the association said that with the milling giant Tongaat Hulett being under business rescue, load shedding could be catastrophic.

It has started counting the losses it will incur this year, as load shedding compromises the quality of sugarcane.

The EWN article points out that the association said its members were expected to spend nearly R190 million in additional energy costs, on account of disruption to irrigation schedules.

The growers need a minimum of six hours of continuous energy supply to run their irrigation systems. However, this has become impossible with the changing stages of load shedding.

The article points out that growers are now forced to irrigate whenever electricity is available, regardless of demand, according to the association.

The association has appealed to Eskom and the government to find urgent solutions to its challenges.

Task team to be set up to monitor power cuts’ impact

Meanwhile, Government is setting up a task team to evaluate the impact of loadshedding on the agriculture sector and the role of loadshedding when it comes to food security.

The article points out that the task team will comprise government, industry participants, and energy specialists, and “will continue to monitor the impact of load shedding on the sector and its ability to provide safe and nutritious food to South Africans,” said the Agricultural Department.

This was the outcome of a meeting between Agriculture, Land Reform and Rural Development Minister, Thoko Didiza and industry leaders in Pretoria in md January.

At the meeting, workers and business owners highlighted the crippling impact Eskom’s rolling power cuts have had on the sector.

The article points out that Department spokesperson Reggie Ngcobo said the task team will comprise government, industry participants, and energy specialists.

“The team will continue to monitor the impact of load shedding on the sector and its ability to provide safe and nutritious food to South Africans,” he said.

The article adds that, at the meeting, workers also highlighted the threat to food security in the event that the escalation of load shedding continues to take place at short notice.

According to Ngcobo, Didiza emphasised that the agricultural industries will continue to ensure the availability of food and fibre.

The EWN article points out that he said the possible development of alternative power sources was also analysed.

“The technical work of measuring the financial cost is underway and will help draft the sector’s strategy. The task team will also explore short, medium and long-term interventions to ease the burden of load shedding within the farming, food fibre and value chains.”