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Company Once Hailed by Ramaphosa Risks Closure

Soweto Creamery’s owner Thando Makhubu can be seen speaking to VOA in Johannesburg, South Africa in Jan., 2023.
Soweto Creamery’s owner Thando Makhubu can be seen speaking to VOA in Johannesburg, South Africa in Jan., 2023.

Soweto Creamery, once praised by South African President Cyril Ramaphosa for opening its doors with the help of government COVID-19 grants, risks folding up if the latest epidemic of rolling blackouts persists, its owner told VOA.

South Africa's record power cuts is forcing small businesses to rely on expensive generators to keep running, threatening their existence and the country's economic growth.

Several hours of blackouts is the new normal in Africa's most industrialized economy — it has seen more than 200 days of blackouts imposed by state power company Eskom since July last year.

Known as load shedding, the cuts can happen with only a few hours’ notice and last up to 12 hours per day, putting frozen stocks at risk.

In recent times, the situation has left the team at Soweto Creamery only a few minutes to finish an order of fluffy waffles and ice cream before the power goes off.

Owner Thando Makhubu told VOA that if the current level of cuts continue, they risk closure.

“Ice cream has a particular structure, if it melts and it freezes again, it won’t be the same, so we can’t afford not to have power,” he said, adding, “but at this point if load shedding continues to hammer us like this we will have to close down unfortunately.”

A year ago, President Cyril Ramaphosa publicly praised the company for opening its doors thanks to the government’s monthly $23 COVID grant. Ramaphosa’s attention helped boost business at Soweto Creamery, but the cost of running on a generator is just too high.

Although the government has said that it will solve power problems within two years, experts are skeptical.

“Unfortunately, the sad reality is, according to my predictions, load shedding is projected to double over the next five years and not be resolved within five years but actually double and come to a peak in five years time,” said Hohm Energy’s Matthew Cruise.

“Only now that things are really coming ahead and pretty much the system is breaking, are we seeing the government now making moves and making steps in the right direction of writing up the legislature that would oversee the unbundling of Eskom and independent power companies coming onto the grid,” the former advisor to Eskom added.

Thirty-one-year-old Simphiwe Nkosi used to work in construction but was laid off. His Soweto suburb has been without power for months, forcing more than one hundred families to rely on batteries and candles – more hurdles to finding a job.

“I have to go elsewhere where I can find electricity so I can really apply or send CVs with copies,” he said.

“I still have to get money, taxi to really go out or sometimes we go to the mall just to type, send it there. But sometimes even the mall doesn't have electricity because of load shedding, so yeah, it’s very hard.”

Economists have warned that the energy crisis could plunge South Africa into a recession, thus worsening unemployment already at a record one third of the population.

With just one year left before elections, South Africa’s government has declared ending power cuts its top priority, but it is a promise the ruling African National Congress(ANC) Party has been making for nearly a decade with South Africans they are running out of patience.

On Wednesday, hundreds of them took to the streets of Johannesburg in a protest led by the opposition Democratic Alliance to speak out against a recent electricity price hike and the ongoing energy crisis.

The protestors marched towards the ruling ANC headquarters, Luthuli House, while chanting “Down with the ANC,” as they expressed dissatisfaction with their government whom they blame for the power blackouts.