Minister Ramokgopa's call for more affordable electricity can be a game changer

THE Minister for Electricity and Energy, Dr Kgosientsho Ramokgopa, made an important call this past week for the South African National Energy Development Institute (Sanedi) to develop recommendations on how electricity can be made more affordable.

- ZINGISWA LOSI

Since 2006 when loadshedding first creeped into South Africa, electricity prices have increased by nearly 700%, or a fourfold increase in real terms once consumer price inflation is taken into account.

This has bled the meagre wages of the working class, plunging them into suffocating debt and poverty, and impeded their ability to take care of their families or provide a better life for their children.

It has stifled economic growth as consumers have had to shift their limited cash towards buying electricity. It has made it difficult for SMMEs to grow or create jobs.

More recently it has begun to cripple our mining and manufacturing sectors and other electricity intensive users where electricity bills are now amongst their largest expenditure items. Many foundries have been forced to close, leaving their host rural communities with a bloodbath of job losses and little more than ghost towns.

Workers have similarly had to battle rising costs of transport and food due to international oil price increases. In response to these inflationary pressures, the repo rate was increased over the past three years by 475 basis points, adding further pain to the lives of millions of working and middle-class families and an already stagnant economy.

Rarely have workers’ wages kept pace with these rising costs of living.

These are structural shackles an economy sitting on 1% annual growth over the very same period and a 43.1% and rising unemployment rate (which has essentially doubled during this time) can ill afford.

It was precisely these challenges that drove Cosatu to draft the Eskom Social Compact that was adopted by government and social partners at Nedlac in 2020.