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How Lack Of Electricity Is Killing The Small Industry In Africa

2 Mins read

Power is an essential resource in the world today. It is no more a luxury but a necessity. From many basic household functions and business activities to advanced level tasks, electric power is a central resource for the national economy.

When businesses encounter a lack of electricity and face extended hours of load-shedding, their output decreases (no doubt), and so does the revenue.

Africa is facing one of the worst power crises in history. People have to endure up to six hours of power outage per day and sometimes even more. With an abundant lack of one of the main resources for business, a small industry is among those suffering greatly in Africa. Keep reading to know more details.

Power Challenges In Africa

Africa is facing many threats and challenges today. The power shortage crisis is one that needs prioritized attention from the authorities.

The continent has been facing power shortages for several years now, but the crisis has become severe in the past few months after the pandemic. The pandemic slowed down businesses, and power generation, which was already on the edge of breaking down, reduced output significantly.

In South Africa, Eskom, which is the authority for providing electricity in the country, has cut off 2276 gigawatts of electricity, and there are still six more months to go. Eskom takes away power in different parts of the country. Sometimes the power outage is unplanned, and people have no idea when it will return. Other times, it may be announced that power will be cut off for a few hours, but Eskom is not necessarily on schedule always.

Besides South Africa, most sub-Saharan African countries have low-grade and poorly maintained grid stations. The outdated setup leads to the breakdown of supply in the middle. The poor setup is unable to uphold and deal with fluctuating power demands. This means that authorities have to cut power and carry out planned load-shedding to avoid complete blackouts.

How Does Power Shortage Affect Small Industries In Africa?

Small industries do not have constantly flowing funds to spend on unlimited resources. Some small industries are usually those that are new and trying to gain traction in the continent. Even big businesses suffer in power crisis mode.

There are equipment and machines that need the power to run. In the case of load-shedding, these tools can’t run to produce the required output on time which leads to the businesses being unable to meet deadlines. This way, sales will be lost, and revenues will dwindle for a small industry that already operates on a low margin.

When revenues are not enough to sustain the MSMEs, the business must shut down and stop operations. Most small organizations are already struggling after being hit by continuous waves of the pandemic. They have just started to get into recovery mode, and being hit by a power crisis will only lead to the stoppage of operations.

MSMEs are the core of the African continent. In South Africa alone, small and medium businesses make up more than 98% of the economy and employ 50% to 60% of the population. Shut down of small businesses will leave a huge sector of the population unemployed and struggling to survive.

What Can Be Done In This Situation?

The power crisis needs to be dealt with head-on and immediately if the economy is to survive. The grid stations and power producers need to be upgraded to the latest technology. Sustainable energy is the future, and if people are to keep using power globally, they must incorporate renewable sources into their power systems. Africa must look towards sustainable energy too.

Dealing with a power crisis is the first step to rebuilding an economy, and African countries need to keep it a priority.

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