By: Anna Majavu
Many small and medium enterprises are fast losing confidence in the South African government after realising that load-shedding is here to stay and they will never be able to afford their own solar systems. The First Quarter 2023 SME Confidence Index survey, released by private SME financier, Business Partners Limited earlier this month, found that SME confidence in the economy in the first three months dropped because of “the intensified energy crisis, with many small businesses constantly battling with the effects of an unreliable power supply”.
Around 45% said a total collapse of the electricity grid was a big concern for them and they believed it to be possible. Another 44% said they were worried that the grid might collapse but were not sure how likely that was to happen. Of the 417 SMEs who participated in the survey, only 18% had installed solar energy systems. Just 26% had access to a generator, and 17% said they used inverters during load-shedding. “While some SMEs have made the necessary arrangements to install backup power supplies and alternative energy sources, many simply cannot afford the costs involved, said Business Partners Limited.
Even with some government subsidies available for SMEs to install solar power, 37% of the businesses said they would never be able to pay for an alternative energy system. About 45% of the SMEs said they would resort to diesel-powered solutions to keep their businesses running if they had to, while 43% said they would only invest in green or renewable energy options.
The greatest recorded dip was in their confidence that the South African economy would be conducive to business growth over the next 12 months. The respondents were only 56% confident in the country’s economic progress, compared to 77% in Q1 2022. The SMEs said the best way the government could support them was by providing funding. The second best was for the government to support a “direct flow of business from government”, and the third best would be if the government implemented existing economic growth policies which promised more support for SMMEs as major job creators.
The SMEs said the main hurdles they expected to jump over the next six months were cash flow problems, poor economic conditions, and a lack of funding. The survey found a few improvements for SMEs – crime was no longer in the top three reasons for these businesses to be downbeat. They were also confident that it would become easier for them to access finance within the next 12 months.