Massive property, electricity and water rate hikes expected to hit major cities in South Africa soon

 ·4 Apr 2024

Residents of major metros across South Africa face above-inflation increases in municipal tariffs proposed for 1 July 2024, with eThekwini residents again facing the sharpest increases.

The draft budget proposals for the 2024/25 financial year have been presented by the major metros of South Africa, and they reveal that residents can expect a significant increase in tariffs.

Property rates, electricity, water, sanitation, and refuse removal are just some of the services that will see an increase in fees.

The municipal mayors have explained that above-inflation Eskom, water board, and salary increases have made these tariff hikes unavoidable.

However, residents of eThekwini Metropolitan Municipality face the steepest increases, which could significantly impact their finances.

These proposed tariff increases will likely cause concerns and frustrations among residents already struggling with severe service delivery issues.

Although electricity price hikes are mostly in line with Eskom’s 12.72% increase approved by Nersa, Nelson Mandela Bay and eThekwini drafted massive increases compared to other major metros – with the cities of Joburg and Cape Town managing to shield their residents slightly.

Nelson Mandela Bay tabled a harsh 15.7% electricity tariff increase – 2.98% higher than Eskom’s municipal hike – while eThekwini is set to increase by a notable 14%.

eThekwini mayor Mxolisi Kaunda has admitted that the proposed increases are well above inflation but were inevitable because of the current economic climate.

However, with a double-digit increase spanning across most services, The eThekwini Ratepayers’ and Residents’ Association (ERRA) has asked ratepayers and residents to reject the increases amid dismal services and failing infrastructure.

On the other hand, the City of Cape Town has reduced Eskom’s 12.72% municipal rate increase to 11.78%.

Additionally, the City of Cape Town has proposed a 5.7% increase in property rates, a stark difference from the 1.1% decrease tabled last year.

The City noted in its budget that this increase would allow for the continuation of providing rates-funded services, investment in infrastructure and generators to mitigate the impact of load-shedding, servicing of informal settlements, provision of rebates to the most vulnerable, improved safety and security measures ongoing investment in repairs and maintenance, and giving effect to the IDP as it relates to rates-funded services.

The City of Johannesburg tabled a 4.8% property rate increase, with a 7.7% increase in water and sanitation services.

City of Joburg4.8%10.7%7.7%7.7%5.9%
City of Cape Town5.7%11.8%6.8%6.8%5.7%
Nelson Mandela Bay5.0%15.7%6.0%6.0%6.0%

It must be noted that the proposed tariff increases are not yet set in stone and will face various consultation processes.

The draft budgets will go out for public participation and comment and then to the National Treasury for comment before it is tabled in the various councils.

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