Electricity Outage

posted in: SFD Blogs - Ethiopia | 0

Electricity outage is a serious challenge for small firms that use electricity as a source of energy. In this story, we will assess SFD respondents’ views on electricity outages.

ET532 owns a carpentry workshop and although he has some hand-operated machines, most of his machines are operated by electricity. Typically they experience an electricity outage twice or thrice per week and the power outage might last from 15 minutes to 6 hours at a time.  In the summer season, however, electricity outages can occur more than 5 days a week. As he said, even though he has not calculated what these outages cost him, it negatively affects his business as it creates low staff productivity. Even though electricity outages do not stop them from implementing frictional jobs like smoothing wood by glass paper, low staff productivity results in low revenues due to the fixed daily payment given to staff regardless of the amount of work they do. Similar to ET532, ET677 also owns a carpentry workshop with most of his machines and tools being operated by electricity. According to his explanation, although the frequency of electric outages varies from month to month, outages occur at least twice a week and last anywhere from 15 minutes to 6 hours, and during outages, they can only do small jobs. Consequently, electric outages significantly reduce their daily production and thus their daily income. In addition to this, an electric outage directly increases a firm’s cost due to workers’ payments being made despite them working for just a few hours a day. 

ET546 owns a carpentry workshop that uses machines and hand tools operated by electricity. For him, in normal seasons electricity outages occur once or twice a week. For instance, last week, they lost 3 days’ worth of income due to electricity outages.  Frustrated, ET546 said, “I couldn’t return today’s working hours that I lost because of the electricity outage”.    

ET371 also owns a carpentry workshop and since he uses electricity to run almost all of his machines and hand tools, the power outages are his firm’s biggest problem. As he said, unlike other places, there is a higher electric outage in his district with some instances where electricity is cut off for a whole week. During this time he loses substantial income, his estimate is around  15000 ETB (301.42 USD) per month. ET737 owns a carpentry workshop and like other carpenters, most of her machinery runs on electricity. Because of the frequent electricity outages, they too are forced to do only frictional jobs when there is no electricity. According to her, on a normal week, the power goes out for two or three days per week and stays that way from 15 minutes to a full day.

“Electricity is the blood of our business. We can’t do anything if there is no electricity. Consequently, frequent electricity outages are a serious issue for our business”. says ET632, an Auto-shop owner. His vision is for his auto shop to be the best in Addis but because he is constantly unable to deliver services on time due to the outages, he has lost quite a number of customers.  He also mentioned that he still pays full-day wages to his workers, even if they frequently work only a few hours a day, this, in turn, reduces his firm’s profit. To solve this problem, he recently purchased a generator for around 105,000 ETB (2,109.95 USD), money he could have used to invest either in his business expansion or in buying other machinery. On top of this, he now also spends around 5000 ETB (100.47 USD) per week on generator fuel.  

ET529 owns a laundry house and electricity is the most important source of energy to operate her washing machine and iron. As she said, electricity outages are a serious challenge for her business. This problem increases during the Ethiopian winter season due to the clothes taking much more time to sundry, and according to her,  there’s usually no electricity twice or thrice a week and it might stay that way for anywhere between 15 minutes to 8 hours. With electricity unavailable for most of the time, ET529 loses on clients who usually pay higher prices for urgent laundry services and this consequently reduces her business income.  

ET936 also owns a laundry house and needs electricity to wash, dry, and iron clothes. She mentioned that for the last two years she was highly challenged by electricity outages. The other issue at her rented premises is that the power supply is too low to run her washing machines at full capacity.  To solve this problem she resorted to using one of her washing machines at her residential house although this required additional transport costs. Due to these outages, her profit per month has been reduced by 5000 ETB (100.47 USD)  because of the low productivity. 

ET845 owns a spare part modification shop. To modify spare parts, he uses different machines and hand tools that are operated by electricity. His business also faces challenges with electricity outages. Normally for him, electricity is unavailable for 2 to 3 days per week and each time staying that way anywhere between 20 minutes and 8 hours. “ Electr. He went on to highlight how the outages have had serious negative effects on his business such as delayed delivery for his clients and thus client loss and consequently reduced revenue.