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South African has successfully placed itself on the list of some of the countries with the most expensive electricity. The basic utility is becoming an unaffordable luxury for most households. This stark reality is the result of a surge in electricity prices, which have skyrocketed by over 500% in the past 16 years, pushing the nation backwards in its development goals and placing an immense strain on households and the economy alike.
According to Zwelinzima Vavi, general-secretary of the South African Federation of Trade Unions (SAFTU), the situation has reached a critical point.
“We are now having a situation where electricity is simply unaffordable. Not only to households, but also to the economy as a whole,” Vavi stated in an interview with Newzroom Afrika. He painted a dire picture of regression, noting, “It has become a luxury to have warm water in your house. We’re going back to warming water using the fire outside, meaning that we are reversing all of the developmental gains we registered over the past 30 years.”
By Gamuchirai Mapako
While data from GlobalPetrolPrices clarifies that South Africa does not currently hold the title for the most expensive electricity on the continent with nations like Kenya, Mali, and Togo charging more on average the relentless pace of its price increases is unparalleled. The country has rapidly fallen from its former status as a provider of some of the cheapest power to now offering some of the most expensive in Africa.
The primary driver behind this crisis is the state-owned power utility, Eskom, which has held a monopoly over the country’s electricity market for decades. A recent settlement between Eskom and the National Energy Regulator of South Africa (Nersa) is set to exacerbate the problem. The settlement, reached on July 30, 2025, grants Eskom an additional R54 billion ($2.9 billion) in revenue, which the utility is permitted to recoup through higher-than-approved tariff increases in the 2026/27 and 2027/28 financial years.
This decision came after Eskom successfully challenged Nersa’s multi-year price determination, with the regulator admitting to two errors that led to an underestimation of the utility’s revenue requirements. For consumers already buckling under the weight of constant blackouts and high costs, this signals more financial pain to come.
Critics argue that this approach punishes South Africans for Eskom’s profound internal failures. Vavi attributes a significant portion of Eskom’s financial woes to what he calls “odious debt” from World Bank loans, accusing the institution of funding known corruption.
“We shouldn’t pay for that. The communities cannot be held accountable for mismanagement, inefficiencies, and corruption,” he asserted.
This sentiment is echoed by energy expert Chris Yelland, Managing Director of EE Business Intelligence, who described the Nersa-Eskom settlement as “absolutely astounding.” Yelland contends that instead of approving further hikes, Nersa should be slashing tariffs to compensate consumers for years of Eskom’s “irregular and wasteful expenditures.”
“Nersa should be clawing back these costs on behalf of electricity customers in the form of reduced electricity tariffs going forward,” Yelland said, pointing out that consumers have already been forced to absorb massive imprudently and inefficiently incurred costs over the past decade.
A deep dive into Eskom’s operations reveals a culture of staggering financial mismanagement. As a monopoly, the utility has had little incentive to control its input costs, which have more than doubled in ten years. A World Bank analysis from 2019 concluded that to align with international benchmarks, Eskom would need to cut over two-thirds of its workforce. The cost per employee has ballooned by 976% since 1990, from R38, 000 to R913, 000 in 2024, far outpacing the inflation rate of 783.6% over the same period.
Perhaps most egregious are the documented cases of fruitless and wasteful expenditure, where procurement processes completely broke down. Audits have revealed that Eskom paid R26 for a single-ply toilet roll with a market price of R5, R238, 000 for a single mop, R80, 000 for knee pads that retail for R150, and R51 for black refuse bags that cost R2.99. These inflated costs, among many others, have been directly passed on to consumers through tariff increases.
The cumulative effect has been catastrophic. Since 2007, electricity prices have exploded by well over 900%, a figure that far exceeds inflation and wage growth. This has not only made life more expensive for families but has also crippled businesses, stifled investment, and hamstrung South Africa’s economic development.
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