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Business Unity South Africa (BUSA) welcomes Eskom’s announcement today, of its decision to re-phase electricity tariff increases and the Energy Regulator’s (NERSA) decision to accept its application for a lower price increase (of 16%) than the 25.9% approved for the last year of the MYPD 2. The announcement comes at a time when BUSA had become increasingly concerned about the impact of increasing electricity prices on the cost of doing businesses in South Africa. It also comes at a welcome time to assist in reducing the overall impact of administered prices on the inflation basket, and the knock-on effect on interest rates.

While the need for electricity prices to be cost-reflective is understood and accepted, BUSA has always maintained that price increases should be decided in a broad economic context, and located within the imperatives of growing the economy and creating jobs. This includes the need for the cost structure of Eskom to be regularly interrogated.

Security of electricity supply remains crucial to the performance of the economy. BUSA remains committed to demand-side management initiatives, and measures to this end will continue to be implemented within the business community. At the same time, as the economy moves towards a higher potential growth path, as envisioned in the NGP and the NDP, the electricity planning process should accommodate the inevitable increase in demand which will occur. BUSA emphasises the important role that Eskom continues to play in supporting an expanding South African economy.

As BUSA stated in its response to President Zuma’s State of the Nation Address, collaboration with the private sector will be crucial to the design and implementation of any options, such as the present one, to stabilise electricity costs in South Africa. We are committed, in this regard, to working closely with Eskom, Government, Labour, Local Authorities, and other stakeholders.