Ramaphosa vows to help cushion poor families from rising energy costs

President Cyril Ramaphosa has vowed to help cushion indigent families from rising electricity costs.

Last week, the president made a call for the Eskom board to consider measures that can help to mitigate the impact of the 18.65% increase from an implementation timeframe point of view.

“There is little doubt that increasing the price of electricity now, at this challenging time, will add to the difficulties South Africans are facing,” he said.

Ramaphosa said the recent announcement of an increase in electricity tariffs comes at an extremely difficult time for citizens and businesses alike, who are already contending with the high costs of fuel, food and other essentials. In light of this, he announced the following measures being considered by the government to help indigent families bear the brunt of rising electricity costs:

• helping households and small businesses install solar power and energy-saving devices;
• supporting households with rechargeable lights; and
• working with pupils to catch up where load-shedding interrupts lessons.

“We should be able to provide further information on these and other initiatives in the coming weeks,” he said.

Ramaphosa said the new tariff was approved by the National Energy Regulator of South Africa (Nersa) following a prescribed process, which includes wide-ranging public consultation, citing that it is important that the state affirm the independence of Nersa and the importance of following the due legal process in setting tariffs.

“Tariffs that reflect the cost of producing electricity are necessary for Eskom’s financial sustainability and for the utility to be able to service its debt and undertake the critical maintenance needed to end load-shedding.

“This is the problem we face: we have to ensure that Eskom has the resources it needs to resolve the electricity crisis while protecting South Africans from the effects of higher prices,” he said.

Saying there was no simple answer to the problem, Ramaphosa called on all stakeholders, including the government, Eskom, business, labour and communities to work together to achieve a very difficult balance.

The president said rising food and energy prices are fuelling a cost-of-living crisis around the world, with the poor being hardest hit, saying that in South Africa, food prices have increased on average by 12% over the past year.

“At all times we must be guided by the needs and interests of South Africans, especially the poor, both now and into the future.

“We should be wary of short-term solutions we will regret in years to come. As government we will continue to implement policies and measures to mitigate the hardship being experienced by vulnerable citizens.”

Ramaphosa said the government, since the early days of democracy, had implemented a policy of free water and electricity for indigent households.

“The free basic electricity allowance, if implemented properly by municipalities, should shield the poorest households from the effect of the tariff increase. We remain absolutely committed to this policy.”

Other programmes to expand the social wage include:

• the provision of free primary healthcare;
• exempting pupils from poor families from paying school fees;
• a school nutrition programme supporting more than 9-million pupils countrywide; and
• the provision of free tertiary education for students from poor families.

“The zero rating of basic food products for VAT helps to decrease their cost for the poor,” he added.

The national minimum wage, introduced in 2019, has improved the remuneration of many workers, especially farmworkers, domestic workers and other vulnerable workers, he said.

“Another means by which the state is supporting society’s most vulnerable from excessive price increases is through competition policy. During the pandemic, the Competition Commission used its powers to bring down the prices of Covid-19 tests and suppliers found guilty of overcharging for face masks were fined.”

The Competition Commission, which monitors essential food prices, recently found consumers were facing “opportunistic increases” in the prices of sunflower oil, a basic cooking staple for millions of households. All these measures provide an important “social wage” that has helped to cushion poor households from the worst effects of rising prices.

In the face of the energy crisis, Ramaphosa called on all South Africans to pay for the electricity they use. 

“As we work together to overcome the energy crisis, I call on all South Africans to pay for the electricity they use. We can only improve and expand the provision of electricity and other basic services if government and municipalities in particular have the means to do so. Nonpayment and illegal connections make electricity provision more expensive and less reliable.

“The global cost-of-living crisis has been described as a once-in-a-generation economic shock, and it is being worsened by global events beyond our control. As government we will continue with our efforts to expand the social wage, just as we accelerate our efforts to restore a reliable and secure electricity supply.

“We will continue to pursue closer co-operation with all social partners and public entities to find sustainable ways to shield South African households from the worst effects of rising energy and other costs.”

TimesLIVE

Support independent journalism by subscribing to the Sunday Times. Just R20 for the first month.