- Municipal mismanagement blocks 8 million South African households from accessing free basic electricity, leaving only 2 million beneficiaries.
- Electricity Minister Ramokgopa urges a review of pricing policies and emphasises the need for economic growth to sustain free services.
- Rising energy costs and improper municipal fund allocation increase the financial strain on low-income families, heightening the risks of social unrest.
South Africa’s Electricity Minister, Kgosientsho Ramokgopa, has criticised municipal mismanagement for preventing millions of households from receiving free basic electricity. Despite ten million households qualifying for this benefit, only two million receive it.
During his weekly Energy Action Plan (EAP) briefing, Ramokgopa highlighted the flaws in the country’s electricity pricing policy and called for a review. He pointed out the growing financial strain on households due to rising energy costs. Over the past decade, electricity tariffs have surged fivefold, far outpacing inflation.
The government offers 50 kWh of free electricity per month to ease the burden on low-income families. This allowance covers basic needs like lighting, heating water with a kettle, and powering small appliances. However, many eligible households do not receive this benefit.
Ramokgopa blamed unreliable systems and poor municipal management for this gap. “No reliable system ensures that qualified households receive the benefit. Even where systems exist, poor management undermines them,” he said. According to Ramokgopa, the issue stems from poor execution at the municipal level, not a lack of funding.
The national government funds the free electricity program and allocates Treasury grants to municipalities. However, many municipalities misuse these funds, diverting them from their intended purpose.
“Municipalities receive these grants, but they misappropriate the money, redirecting it to other municipal expenses,” Ramokgopa added. He also noted that municipalities face financial pressure due to the stagnant economy, which hampers revenue growth.
While ensuring that free electricity reaches those in need remains crucial, Ramokgopa stressed the underlying economic issues. “This crisis isn’t just about extending free services. The real solution lies in growing the economy. We face a crisis of economic production,” he warned. Without economic growth, the state’s finances will come under increasing strain.
Energy analyst Chris Yelland, managing director of EE Business Intelligence, echoed Ramokgopa’s concerns. “Ramokgopa rightly recognises the failure of the free electricity policy. Municipalities misuse funds meant for poor households, effectively robbing the poor to benefit themselves,” Yelland said.
Yelland also highlighted the impact of rising electricity prices in Johannesburg, which disproportionately affect the poor. City Power, the city’s electricity provider, has introduced a flat fee for prepaid users, which has sparked protests. City Power’s prepaid prices significantly exceed Eskom’s, especially for low-consumption users.
“City Power’s prepaid prices are much higher than Eskom’s, particularly for low-consumption users,” Yelland said. “These steep increases for poor households could lead to social unrest.”
As energy costs continue to rise and resources intended to help people experiencing poverty are mismanaged, Ramokgopa’s call for reform in South Africa’s electricity pricing policy becomes increasingly urgent. The challenge now lies in ensuring these benefits reach those who need them most while addressing the broader economic issues driving the crisis.