Small and medium enterprises (SMEs) are slowing down and abandoning production following persistent electricity challenges which have increased the cost of business.
In an interview on Tuesday, Chamber for Small and Medium Businesses Association executive secretary James Chiutsi said using back-up generators is also challenging.
He said: “It is a disaster actually. Rightly put, it’s SMEs that are taking the biggest hit. We have lots of them who can hardly make ends meet. Others are not sleeping waiting for the time power will be back.
“To use generators, product prices are rising making them uncompetitive. Besides, solar systems and power generators are not cheap.”
Chiutsi said for those who have maintained production, they are burdened with rising production costs of raw materials, which is also affecting their pricing and competitiveness on the market.
A welder in Chileka, Blantyre, Geoffrey Golosi said he barely makes enough income to feed his family because he can’t afford to have backup electricity during the day when there is no power.
“Besides, I can’t stay here late at night because of security lapses around this area. I have to be home in good time, but in most occasions with nothing,” he said.
Despite having an installed capacity of 441.55 megawatts (MW), Electricity Generation Company of Malawi is only generating about 260MW as about 130MW was lost following the destruction of Kapichira Hydro Power Station by Tropical Storm Ana early this year.
On the other hand, Electricity Supply Corporation of Malawi said it is experiencing intermittent power supply in some parts of the country due to instability of its system necessitated by cold and cloudy weather. This means increased load shedding for some customers.
In a separate interview, economist Edward Chilima said it is difficult to graduate the SMEs with the present circumstances.
“Strategically going forward, we need to promote SMEs to be operating from industrial sites as opposed to homes. Operating from homes is as a result of inadequate financial muscle to operate from industrial zones which are deemed expensive.
“This is an area we need to intervene, to capacitate the SMEs to have access to production sites in industrial sites.”
Minister of Industry and Trade Mark Katsonga Phiri, while acknowledging the energy challenges, said the situation is temporal and would not affect government policy on the promotion of SMEs.
Source: The Nation_Thursday, June 9, 2022_by Grace Phiri