Rebate scheme misses the mark for small business energy relief

14 August 2023

The DA notes National Treasury’s announcement last week that it has officially launched the Energy Bounce Back Loan Guarantee Scheme (EBB) – an initiative it claims will alleviate the impact of continuing damage resulting from unreliable power supply for small businesses and households.

While the energy crisis devastates the small business sector, the solution presented by Government is woefully inadequate as the scheme's design raises serious concerns.

Small businesses that are already burdened by existing debts and the precarious economic environment, may find the prospect of taking on additional loans, even with a government guarantee, untenable, especially if investments in alternative energy sources fail to yield the expected returns. Moreover, the administrative complexity of the EBB may exclude micro and small businesses and inadvertently favour those businesses with existing banking relationships and financial expertise. This will exacerbate economic inequalities within the sector.

This situation is unacceptable. Minister of Small Business Development, Stella Ndabeni-Abrahams, who is entrusted with protecting small businesses from predatory practices, has remained conspicuously silent on this rebate initiative. Her failure to speak out or provide updates on the "energy relief package" she promised on the 18th of January this year is deeply concerning.

The Minister must act decisively. Reconsolidating funds within her department to direct subsidies towards solving the energy crisis for businesses would offer a more immediate, accessible, and targeted solution, free from the complexities and risks associated with loans. Her silence and reliance on the Minister of Finance's solar rebate package appear to be a dereliction of her commitment to the small business sector.

We will be writing to the Minister to ascertain an exact status update on the implementation of the very necessary package she announced. This more integrated approach, working closely with the Small Business Development Ministry, is essential to tailor support to the specific needs and challenges of different types of small businesses.

South Africans deserve more than vague commitments and this level of unresponsiveness. They deserve a government that is willing to do what it takes to keep the lights on. If the ANC is not up to the task, then it must step aside and let those who are leading the way. The DA stands ready to provide the leadership and solutions that South Africa's small businesses urgently need.

Issued by Jan de Villiers, DA Shadow Minister of Small Business Development, 14 August 2023