By the African Centre for a Green Economy
South Africa’s economy is under immense pressure. With high unemployment, sluggish growth, and the rising cost of living, ordinary citizens and businesses are already struggling to make ends meet. Now, Eskom’s latest electricity tariff increase has added another heavy burden to an already strained system. Even though NERSA approved on a 12.7% increase, instead of the 36% that ESKOM requested, this hike is still devastating. It’s a barrier to economic recovery, a driver of inequality, and a missed opportunity to accelerate South Africa’s transition to a sustainable energy future.
The Heavy Burden of Rising Electricity Costs
For years, Eskom’s continuous tariff increases have placed a growing strain on households and businesses. This latest hike comes at a time when many South Africans are barely keeping their heads above water. Instead of stimulating growth, these rising costs push more people into energy poverty and make it even harder for small businesses to survive.
Low-income households are hit the hardest. Many families are already forced to choose between powering their homes and meeting basic needs like food and healthcare. For them, the tariff increase is not just an inconvenience—it’s a crisis. Meanwhile, small and medium enterprises (SMEs), the backbone of our economy, face rising operational costs that threaten their survival. Higher electricity prices mean increased costs for goods and services, driving inflation and making everyday necessities even more expensive for consumers.
A Barrier to Economic Growth and the Green Transition
South Africa’s economic recovery depends on creating an environment that supports investment, innovation, and job creation. However, the relentless rise in electricity tariffs makes the cost of doing business increasingly prohibitive. Energy-intensive sectors like manufacturing and agriculture will suffer, potentially leading to job losses and slower economic growth.
At the same time, Eskom’s reliance on coal-fired power stations means that higher tariffs are not translating into a cleaner or more reliable energy system. Instead of burdening consumers with ever-increasing costs, South Africa should be accelerating its transition to a decentralized, renewable energy-based system. This shift would reduce our dependency on Eskom’s unreliable and expensive electricity supply while creating green jobs and ensuring long-term energy security.
The Urgent Need for Reform and Renewable Energy Investment
The current situation underscores the urgent need for a just transition to a green economy—one that prioritizes affordable and sustainable energy for all. At the African Centre for a Green Economy, we believe that bold action is needed now to address this crisis. Here’s what we’re calling for:
1. Greater Investment in Renewable Energy
Expanding solar, wind, and other renewable sources will reduce reliance on Eskom and drive down electricity costs in the long run. Renewable energy projects also have the potential to create thousands of jobs and stimulate economic growth.
2. Decentralized Energy Solutions
Supporting independent power producers (IPPs) and community-based energy projects can help break Eskom’s monopoly and create a more resilient energy system. Decentralized solutions can provide reliable and affordable electricity to underserved areas, empowering communities and reducing inequality.
3. Protection for Vulnerable Consumers
Government intervention is needed to shield low-income households and SMEs from the worst impacts of rising tariffs. Subsidies, grants, or targeted relief programs could help mitigate the financial burden on those who are most affected.
Conclusion: A Call for Bold Action
Eskom’s tariff increase is yet another blow to South Africa’s struggling economy. Instead of continuously raising electricity prices, we must accelerate our transition to a more sustainable, affordable, and resilient energy future. Investing in renewables and energy efficiency is not just an environmental imperative—it’s an economic necessity.
The African Centre for a Green Economy remains committed to advocating for policies and solutions that drive inclusive and sustainable economic growth. We believe that energy access should be a right, not a privilege.
Join us in the fight for a just energy transition in South Africa. Together, we can build a future where clean, affordable energy powers our homes, businesses, and communities—ensuring a brighter tomorrow for all.
Let’s work together to turn this crisis into an opportunity. The time for action is now.
