Load Shedding and its Influence on South African Small, Medium and Micro Enterprise Profitability, Liquidity, Efficiency and Solvency
Business Re-Solution Working paper BRS/2021/001
16 Pages Posted: 3 May 2021
Date Written: April 21, 2021
The socio-economic significance of Small, Medium and Micro Enterprises (SMMEs) to the South African economy cannot be overstated. Although South African SMMEs assist the economy with alleviating poverty, boosting the national economy, and creating jobs, they are reported to have very weak sustainability rates with 75% of these business entities failing after operating for less than three years. Among the reasons for the latter dispensation is the volatile supply of electricity (load shedding). Since most South African SMMEs are reliant on electricity to operate, this study aimed to theoretically investigate the influence which load shedding has on the profitability, liquidity, solvency and efficiency of these entities. This non-empirical, exploratory student constituted a conceptual paper. From the research conducted, it became evident that the profitability, liquidity, efficiency, and solvency of South African SMMEs are adversely influenced by load shedding.
Keywords: Load shedding, South Africa, Small businesses, SMMEs, Sustainability
JEL Classification: M10, M20, M40, M41
Suggested Citation: Suggested Citation