Incompetence is sabotaging SA business!

Despite an often negative perception globally of South Africa, it is actually a place with great potential. It has amazing tourism with its native animals, great people and some spectacular scenery. I am fortunate to live and work in Cape Town with its iconic Table Mountain as a constant backdrop. Business has been steadily increasing despite a level of external factors which can only be blamed on a strong level of incompetence in administration in several areas. These challenges are also being highlighted in foreign media, having the ripple effect of impacting current and future tourism potential, which will only further harm the economy of the country. Let me explain.

Some 18 months ago Cape Town suffered from a major water crisis - not the governments fault, however the handling of this and the lack of preparation along with poor reaction to this caused great harm to businesses and people alike. We almost ran out of water, and were down to a limit of 50 litres per person per day. Operating restaurants became a challenge, as we need water. Water was bought, water tanks installed, Plan B and Plan C actions put into play, all at cost, and all exponentially impacted by a 'stay away' from tourists who had their local media stating that Cape Town had no water. No forward planning or expenditure into water desalination took place, rather a feeble temporary purchase of several small plants which produced around 2 million litres of water a day each, when water usage was around 500 million. It was like peeing in the the ocean and expecting an increase in water levels!

This passed fortunately, with great rains over last 12 months, and dam levels are back to over 80% so thankfully things started getting back to normal....then we started having load shedding last year!

As an Australian, I had not previously heard of load shedding, until I worked in Pakistan where it was the norm. Load shedding is the cutting of power due to inability to produce enough and is a managed process. In Pakistan we had generators in stores, and at homes etc, but in Sth Africa, this was not the case. No power, meant no business!

Fortunately last year was bearable, and although it had an impact on business, it was not end of the world time.

This year however, and in particular in the last few months, the game has changed. Load shedding is back, and its back in a crazy way all due to the inability of the local energy company Eskom to operate their supply with any level of competence. For the last few weeks we have been experiencing power outages in what they refer to Stage 2, 4 6 etc...usually the power goes out for 1-2 hours at a time, and from 1 3 or 4 times per day depending on the stage.

We are hovering between Stage 4 and 6, meaning we are losing power 2+ hrs at a time up to 3 times a day on 4, and when on Stage 6, this often creeps up to 4hrs per day. When you are operating businesses which require power to produce and sell your products this is a major blow! We are experiencing (as is everyone) around 4-8hrs per day from our operating and selling window of 12hrs without power, and an inability to sell...between 30-60% of our potential has been eliminated from us and totally out of our control, all due to incompetence of Eskom, and the government to rectify this issue.

Many excuses or stories are circulating as to why - all met with skepticism and conspiracy theories, ranging from wet coal, maintenance issues, management issues, floods in neighbouring countries, and even plans by some to bring in another supplier so they are making the current one look in-efficient. Whatever the truth is, who knows, or who cares, this is destroying businesses. Everyone is impacted, yet limited, if any action is taking place. This is separate to the long term damage being done to the economy in other areas such as tourism. First they have no water, then no power! Why would people spend their hard earnt cash to come here with these ongoing issues, which then circles back to impact business even further! Just yesterday load shedding caused a breakdown on the Table Mountain cable car stranding tourists on top of the mountain, most probably forced to take the quite challenging walk from the top - a great Sth African story they will have!

For us in the food business, this is major pain in the butt, as well as the pocket! This has so many challenges and business impacts:

• lost revenue from the disruptions.
• unproductive time for the staff - the stores get cleaned and cleaned, and you can re-train and re-train, but soon you see standing around!
• wasted product - dough is temperature sensitive- it doesn't like it when the cool-rooms go off, and waste becomes an increased issue.
• blown equipment - compressors and motors do not always like the on/off and surge of power and blow up - adding wasted expense.
• capital expenditure needs - we need to look to buy generators to attempt to keep stores open and mitigate losses, which becomes a challenge when your revenues are down eroding margins as well
• annoyed customers - they don't know what's going on, and when they think they have ordered online, they actually haven't as the store may not get an order due to no connectivity..
• Bottom line it's all bad......

Business is challenging enough for people, and we take power for granted in most places. When situations like this arise, there forms a lot of anger and frustration, and this is only made worse when those who are in control take no ownership, nor find or offer any solutions to the situation. This is extremely concerning not just for us, but for South Africa in general, as the cost to the country is massive. It's just sad.

Having said all this, as a business, you simply have to do what you can to deal with it, manage it and find a way to get on with things and mitigate risks and exposure. We learnt a lot of lessons in the water crisis and I'm sure we are about to use some of those learnings in the current situation to future proof ourselves from the uselessness of the providers we deal with.

"Let there be light"......and there wasn't!