By Noko Mashilo
Electricity and Energy Minister Kgosientsho Ramokgopa has emphasised his commitment to reducing the proposed 36% electricity tariff hike while maintaining the operational integrity of Eskom. Speaking at the World Economic Forum (WEF) in Davos, Switzerland, Ramokgopa highlighted the importance of affordable electricity in driving economic growth, alleviating poverty, and supporting the nation’s development goals.
Ramokgopa is part of the South African delegation, led by President Cyril Ramaphosa, at WEF’s 55th annual meeting. South Africa’s energy challenges have caused numerous problems for the SMME sector. During power outages, businesses are unable to process electronic payments, have no access to wi-fi, and their electronic gadgets and stock get damaged. Power outages also open them up to the risk of security threats.
Small businesses have warned that the proposed tariff hike is too steep and will have a detrimental impact. The National Energy Regulator of SA (Nersa) is expected to make a final decision on the tariff hike by the end of January 2025. The regulator said that “this is due to the extended public hearing period, the information received, and further clarification required.”. “Nersa understands the importance of this decision and remains committed to ensuring that all inputs received during the public participation process are considered.”
Ramokgopa said electricity needed to be affordable, and it impacted the poor. “Their share of income spent on electricity is higher as compared to the middle and higher-income households. On the other hand, one needs to protect the interests of Eskom. “I am confident that we will not be at a 36% increase. We will be lower than that without undermining the ability of Eskom to execute,” said Ramokgopa, who would also look into innovative interventions on how to deliver cheaper electricity.
Economists estimate that load-shedding cost the South African economy over R220 million up to 2023 and reduced economic growth in 2023 by around 1.8 percentage points.
