Small businesses are facing a serious setback, with the City of Johannesburg proposing to raise electricity charges by up to 53% starting in July.
Under the proposed hikes, prepaid electricity surcharges will increase from R200 to R270 per month, while the network capacity fee will climb from R130 to R200.
The increases, which form part of Johannesburg’s 2025/26 budget, are sparking fears that SMMEs that are already struggling to survive may be forced to cut trading hours, lay off workers or shut down altogether.
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The tariff hikes come at a time when small businesses across the city are already battling power outages, rising fuel prices and dwindling consumer spending.
According to city officials, the increases are necessary to pay for infrastructure upgrades and to cover soaring supply costs from Eskom. But for small businesses operating on thin margins, the timing could not be worse.
Lindiwe Mokoena, a hair salon owner in Soweto, said the hikes were piling on the pressure.
“We already lose money every day because of load-shedding. Now they want us to pay hundreds more just to keep the lights on. I might have to close earlier every day because I can’t afford to run my dryers and clippers longer. It’s like they’re forcing us out of business,” said Mokoena.
According to the city’s proposals, electricity tariffs will rise by 12.74%, water and sanitation fees by 13.9% and property rates by 4.6%. However, prepaid customers, including most township and inner-city businesses, will most likely face even sharper increases due to added surcharges and capacity fees.
Unlike large corporations that can afford solar systems or negotiate lower rates, small businesses often have no choice but to remain on prepaid meters, leaving them exposed to rising costs.
Sipho Dlamini, who runs a laundromat in Johannesburg’s inner city, said he was already struggling to stay afloat.
“Electricity is my biggest expense. I can’t raise prices too much because my customers are also struggling. But with these hikes and the diesel I have to buy for the generator during power cuts, I honestly don’t know if I’ll make it through the year.”
Johannesburg’s R87.6 billion budget sets aside billions for entities like City Power and Johannesburg Water, which are responsible for upgrading infrastructure.
But business groups argue that small enterprises, particularly those in township and inner-city economies, are bearing the brunt of the funding drive. They are calling on the municipality to reconsider the amount of the hikes or to offer relief measures before more businesses go under.
As the July deadline looms, small business owners say they are being forced into making impossible choices just to keep their doors open in an economy that keeps stacking the odds against
