South Africa’s electricity tariff hike will hinder agriculture
South Africa’s National Energy Regulator (Nersa) announced that a tariff increase of 18.65% has been granted to the energy provider Eskom for the 2023/24 tariff year. Although the increase is lower than requested by Eskom, 18.65% is intolerable for agriculture says Jannie Strydom, Chief Executive Officer of Agri Western Cape (AWC).
“This is a drastic increase in tariffs for electricity supply that is already extremely unreliable. Consumers therefore pay more for less power,” says Strydom.
During the public hearing, AWC emphasised that agriculture cannot afford a tariff increase above inflation. “The energy needs of farming operations remain the same irrespective of the electricity tariff. Producers are now forced to invest in alternative sources of electricity, which requires enormous capital,” Strydom argued.
This tariff increase is applicable to Eskom’s direct customers and will come into effect on 1 April 2023, while the increase for municipal customers will only come into effect on 1 July 2023. Municipalities now have an opportunity to apply for a tariff increase and are likely to add a surcharge for their clients.
“Food security cannot rest solely on the shoulders of producers. Food production is currently under immense pressure. Decision-makers need to recognise the seriousness of the problem – urgent intervention is needed,” said Strydom.