Social unrest warning for South Africa
Eskom’s proposal to hike electricity prices by over 36% in 2025, by 12% in 2026, and 9% in 2027 could spark widespread social unrest, the South African Human Rights Commission (SAHRC) has warned—echoing concerns raised by the Department of Electricity and Energy in July.
Electricity Minister Kgosientsho Ramokgopa said on Tuesday (1 October) that the government was looking to intervene in Eskom’s application. He’s confident action will be taken before energy regulator Nersa makes its ruling on the matter by the end of the year.
Ramokgopa previously described the increase as “untenable”, noting that Eskom and municipal tariff increases are unsustainable to the majority of the country’s population—including the middle class.
“We are getting to a situation where your lower-to middle class – even your public servants – can no longer afford the cost of electricity in this country,” he said.
The minister said the price hikes pose a national security problem because “people are not going to just fold their arms.”
“It’s an affordability question; over a period of time, if you don’t address it, it’s a national security problem,” he said.
Aside from the direct impact of costs, higher electricity prices also add inflationary pressure, which impacts the cost of goods and the cost of doing business.
“This is a problem that is likely to become acute over a period of time, and needs to be addressed urgently,” Ramokgopa said.
Speaking to Cape Talk, SAHRC chair Chris Nissen added to the warnings, saying that “We are foreseeing, as the commission, that these kinds of issues are sparks in our community that can ignite unrest.”
Energy experts have previously pointed out that electricity pricing, particularly that which impacts the most vulnerable, are highly sensitive issues that often lead to social unrest.
This was flagged earlier in the year when the City of Joburg implemented a R200 per month prepaid electricity network capacity and service fee which was applied to the vast majority of electricity users, including indigent households.
Following backlash and the threat of public action against the move, the city ultimately relented and agreed to review the tariff.
Eskom’s fees have a national impact.
Direct customers with low power usage could see their bills increase between R540 and R970 per month, and high-power users could see bills jump between R1,060 and R1,450 per month if the hikes go through.
The utility has defended its tariff hike application, saying that it is based on the power utility’s needs and costs to produce electricity.
It has effectively laid out that there is little choice in the matter, as the tariff hikes are needed to fund operations, failing which, something will have to give: either the government funds its revenue shortfall, or it cuts costs elsewhere (such as reducing maintenance) which could have catastrophic consequences.
Ramokgopa, meanwhile, insists that the 36% price hike won’t go through.
“We will provide relief to everyone,” he said, without specifying what action would be taken other than saying the government could suspend certain requirements it has of Eskom.
“I am confident that this is not the figure we will be seeing.”
The government has processed an R250 billion debt transfer with Eskom, which came with a list of stringent criteria and limitations—one of which is that the utility cannot take on more debt.
Previously, when tariff applications were denied and truncated, Eskom would raise debt to cover the shortfall. This is no longer an option, under the conditions enforced by National Treasury.
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