TIMOTHY TREAGUS: Running on empty: Informal economy crippled by rolling blackouts

The Council for Scientific & Industrial Research recently revealed that we endured more load-shedding in September than in all of 2020, with most of the blackouts falling in the stage 4 category. 

In his medium-term budget policy statement last month finance minister Enoch Godongwana indicated that the government expects to move between a third and two thirds of Eskom’s R400bn of debt onto its own balance sheet, as the beleaguered power utility continues to threaten the growth and daily functioning of SA’s economy.

What the medium-term budget did not cover was the effect load-shedding has had on our country’s informal economy, with informal traders suffering daily losses as their businesses are crippled by the state’s inability to ensure a stable power supply. 

As a market research firm that specialises in capturing data and insights from our informal market, we prepared a report on load-shedding that could be offered to the government to reveal how rolling blackouts have affected our country’s informal traders, their homes, businesses, income and mental wellbeing. The findings painted a dismal picture of how load-shedding has plunged vulnerable communities into darkness, with increasing levels of poverty, crime and hunger across all provinces.  

While load-shedding unreservedly threatens the growth and daily functioning of the general economy, it has become evident that far more attention needs to be paid to the manner in which it threatens the survival of township economies. 

The majority of individuals surveyed in the Yazi Loadshedding Report earned R500-R6,000 a month. Over 40% of respondents indicated that their loss of income as a result of load-shedding ranged between R1,000 and R5,000 a month. In most cases this would constitute a loss of more than 50% of informal traders’ income.

The average amount lost by traders in September in the Western Cape was R2,081.77, in KwaZulu-Natal R2,029.28, and in Gauteng R2,402.44. Respondents shared that load-shedding resulted in a loss of customers, the slowing down of business activities and output, and a decrease in working hours.

In a shocking account regarding personal safety, more than 83% of respondents in the Western Cape, Gauteng and KwaZulu-Natal indicated that they had experienced an increase in crime during load-shedding, including an increase in gunfire, robberies and repeated cases of cable theft every time the power went out.

Mpumalanga and the Northern Cape recorded the highest increase in crime rates, with 92% and 87.5% of survey respondents respectively sharing that they had seen an uptick in crime due to load-shedding in their province. 

These figures correlate with the findings presented by President Cyril Ramaphosa at his summit against gender-based violence earlier this month, where the latest national crime statistics presented a 52% increase in the murder rate of women, with an appalling 46% increase in the murder rate of children between quarter one 2021 and quarter one 2022. 

The load-shedding report was also able to confirm that more than 89% of members of our informal economy believe continued blackouts will lead to a national uprising, including acts of chaos, increasing strikes and looting. This figure was particularly high in KwaZulu-Natal, where over 91% of respondents believed an uprising would ensue if access to electricity remained erratic. 

Unfortunately, the data also reflected a tragic loss of life due to poor cell connectivity during load-shedding, which inhibited township dwellers’ access to healthcare services and ambulances during medical emergencies. 

Up to 36% of respondents shared the need to purchase R200- R400 of additional data during September to avoid being disconnected from any online activities as a result of load-shedding. This increases the operational costs of businesses within our informal economy and prevents SA’s poorest from participating in the digital economy to grow and scale their businesses, especially when the additional spend on data is still unable to keep them connected to the online world due to poor reception.

Almost 54% of survey respondents operating within the informal economy have had to replace their alarm systems, fridges, freezers, stoves and a number of other electronic appliances due to damage caused by repeated bouts of load-shedding.

A similar percentage indicated that they had also faced water disruptions due to the power outages, with more than 42% being left without water for four to six hours per day. This contributed to a lasting impact on their ability to cook, bathe, feed their children and run their businesses in an efficient manner. The provinces that recorded the highest rate of water cuts as a result of power outages were Limpopo, the North West, Mpumalanga and Northern Cape.

Sadly, little research has been done into how load-shedding has affected the mental wellbeing of informal traders. Yazi’s findings confirm that business owners and their families have reported feeling mentally drained due to its impact on their ability to generate an income, while making daily living conditions that much harder in underprivileged communities, where access to basic resources is already limited.

A common thread was the inaccessible nature of alternative forms of power due to affordability. Battery power banks, generators, solar-powered lights and uninterruptible power supply (UPS) devices are simply not within reach. Only about one in 10 respondents in the Western Cape, Gauteng and KwaZulu-Natal indicated that they had access to a UPS device.

Respondents also shared several accounts of how load-shedding affects their anxiety and stress levels. Nurses working in local clinics indicated that it can sometimes take a few minutes for clinic generators to kick in, leaving nurses in the dark halfway through patient procedures and causing severe distress to both the medical assistant and patient. 

Single mothers shared that it has been an immense struggle to replace perishable food items, forcing children in townships to go to bed hungry on several occasions. Standard nutrition levels have dropped across the board as families simply cannot afford to continue replacing meat and milk when these cannot be stored reliably in a fridge or freezer.

Matriculants and job seekers within our informal economy reported a spike in their anxiety levels when they have to go several days without washing themselves or their clothing due to load-shedding. 

It is clear that our informal market simply cannot function without access to power and electricity, causing extreme financial and mental distress. It is being left behind, driving the most vulnerable members of society into deepened cycles of poverty as their businesses and livelihoods are destroyed by an erratic power supply.

The governing party will need to address this at its policy conference in December, as the data is beginning to show that informal traders will no longer support a government that is unable to cater to the needs of the country’s informal market.   

• Treagus is CEO and founder of market research firm Yazi.