BOSA makes submissions to NERSA rejecting the 33.8% electricity increase

7 November 2024

Build One South Africa (BOSA) stands against NERSA's proposed electricity tariff increase, which would impose further economic hardship on South Africans, especially low-income households, small businesses, and rural communities already burdened by unemployment, stagnant wages and rising costs. This increase threatens household budgets, job security, and essential small businesses, deepening inequality and hindering economic growth. The proposed hike amounts to a 33.8% increase over the past two years, further straining household incomes. 

Lower-income households, which often spend up to 20% of their limited earnings on electricity, would face even tougher choices between essential needs. For many, higher electricity costs may lead to reliance on unsafe energy sources, risking both health and food security. Multi-generational households, especially in under-resourced areas, would bear additional burdens.

The tariff hike risks destabilizing small, micro and medium enterprises (SMMEs), critical drivers of employment and innovation. Higher electricity costs threaten to reduce profit margins, deter investment, and stifle job creation, particularly in township and rural economies.These impacts contradict South Africa’s National Development Plan (NDP) goals to expand SMME contributions to the GDP and reduce unemployment.

BOSA urges Eskom to address its historical inefficiencies by committing to full transparency on the allocation of funds generated through tariff increases. Eskom must prioritize investments in renewable energy and infrastructure upgrades to reduce load shedding and ensure grid stability. Public trust in Eskom can only be rebuilt through independent oversight, regular financial reporting, and stringent anti-corruption policies.

Recommendations

To balance Eskom's financial needs with public welfare, BOSA recommends:

Staggered Increases: Phasing in tariff hikes to mitigate the immediate economic shock.

Enhanced Subsidies: Providing more comprehensive support to low-income households.

Incentives for Renewables: Encouraging households and businesses to adopt renewable energy solutions, decreasing reliance on Eskom.

Strengthened Oversight: Implementing transparent, independent accountability mechanisms within Eskom to oversee the use of tariff-derived funds.

BOSA calls on NERSA to carefully consider these measures to protect South Africa’s vulnerable populations while fostering economic resilience.

Issued by Roger Solomons, BOSA Acting Spokesperson, 7 November 2024