Two days ago, National Energy Regulator of South Africa (Nersa) has agreed to Eskom increasing its tariff by over 15% for the 2021/22 financial year. This is a huge blow to South Africans who are already reeling from the effects of the Covid-19 lockdowns as well as Eskom’s own ongoing load-shedding.

Millions of people have lost their jobs due to the ongoing pandemic. A study that was published toward the end of last year revealed that nearly half of small businesses closed due to the pandemic.

Business Insider South Africa has listed a number of notable businesses that failed to survive the lockdown. The list includes Edcon, Comair and Phumelela Gaming & Leisure.

There is so much joblessness in South Africa. For companies and institutions that survived the lockdown, it is even very difficult for them to effect the routine inflation based salary increment.

The South African economy has already been losing a lot jobs and money for so many years before the lockdown. Last year, CSIR reported that load shedding cost South African economy at least R59bn in 2019.

Eskom’s load shedding has been around for more than 10 years. It is for this reason that one economist pointed out that load shedding may have been the main cause of layoffs in many sectors. The lockdown compounded an already existing problem.

The hefty rise of the electricity tariffs by Eskom will now put even much more strain on cash-strapped consumers who will now sink deeper and deeper in debts. This development will actually have a two-fold effect.

It is very obvious that people will now pay 15 % more for electricity in their homes. As if that is not enough, companies that offer goods and services, such as super markets, will also increase their prices due to the increase in their own electricity bills.

While Eskom is celebrating due to the addition of an extra R10bn to their coffers, it will not be easy for the consumers. I sadly see tough times ahead!

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