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Load shedding economy is ‘new normal’ and that’s terrible, but you can save billions with ease – Michael Jordaan

Load shedding economy is ‘new normal’ and that’s terrible, but you can save billions with ease – Michael Jordaan

By Michael Jordaan

Every business that I talk to is suffering from load shedding. It is simply not possible to run a modern economy without power. We can forget about being competitive in the Fourth Industrial Revolution if we cannot fix the basics like power, water and the rule of law. After all, electricity was the main source of progress in the Second Industrial Revolution and that was 150 years ago!

I haven’t lost faith that we will win in the end, but to survive and even thrive we must confront the brutal facts of our current reality and take the right actions to adapt. The brutal facts are that 2022 has already been South Africa’s most intensive load-shedding year, while energy availability (at 53%) is also at an all-time low. Things will most likely get worse in 2023 as Eskom’s coal fleet continues to deteriorate while renewables and independent power producers take time to come on stream.

Eskom has indicated that in this calendar year to date, they have already burnt through R12 billion of diesel. Research consultancy Intellidex estimates that prolonged load shedding is costing us between R150 million and R250m a day. A year of load shedding can run up to a horrific R7.5bn every month, and R91bn a year. The unquantifiable costs such as huge job losses, loss of confidence by investors and skilled emigration is wreaking long-term havoc on the economy.

Here’s what doesn’t help: ranting on social media, pointing fingers and saying “they should”. Of course you’re completely within your rights to criticise and you’re most probably right in the macro solutions too.

Still, the best way to solve a problem is to do something about it. Fortunately, there is a huge amount that business and individuals can do to save billions, to off-set the above impact. Moreover, it is far more energising (excuse the pun) to be part of the solution than to criticise from the sidelines.

Here are three impactful things you can do to adapt and save money – if everyone in South Africa did just this, it could potentially save up to R117bn each year. You’ll see that most are remarkably easy – you just have to do something about it.

Stop paying for voice calls and SMS messages: WhatsApp voice calling using mobile data can cost as little as 2c a minute; or when backed by uncapped wi-fi, they are effectively free. Industry revenue from mobile voice services amounted to around R40bn in 2021 so the savings will be significant.

Add your own solar power: You don’t even need to go off the grid to switch to solar, especially if you are a daytime business that uses power while the sun shines.

The capital costs of business solar are usually recouped in four to six years. Banks are now coming to the financing party to assist with the upfront cost. The average saving that I am witnessing is between 20% and 40% based on current tariffs of R1.50/kWh. Of course, these percentage savings will only become higher when Eskom increases prices by 9.6% next year to bring their “allowable revenue” to R264bn. But even a small percentage saving (let’s say 20%) will bring massive relief to South African consumers and businesses.

Open a free bank account: The fee structure of South African banks is much too high. An analyst report by UBS calculates that savings of up to R300 per month are attainable by individuals. Savings for businesses are much higher, easily R1 000 per month. There is no need to completely switch banks (yet) if that bothers you.

Stop paying bank fees on payments, fund transfers, debit orders and card swipes. Their unique-in-the-world security features further add to the positive financial impact.

The potential savings for the 376 000 businesses registered in South Africa is R4.5bn a year. And if the 40 million South Africans that have bank accounts can save a mere R50 per month there’s another R24bn of relief that is possible.

The current pain experienced is calling for change, as doing nothing means even more pain. My hope is that some of you will see that there are ways to not just wait to make things better, but to make things better yourself.

Michael Jordaan is the chairperson of Bank Zero.


Original Article