Power Surge Hits SMEs

Power Surge Hits SMEs


Last week, the National Energy Regulator of South Africa (Nersa) granted Eskom an 8% annual increase over the next five years. This was half of the 16% originally applied for by the power utility, which was opposed by business, trade unions and civil society groups at hearings across the country.

Cecilia Khuzwayo, Nersa chairwoman, said Eskom’s request had come amid a continuing global economic slowdown.

170% surge in cost of power

South Africa’s electricity prices had rocketed by more than 170% over the past five years, while administered prices in other Brics (Brazil, Russia, India, China, South Africa) countries had decreased by more than 36% in the past decade.

The price increases in South Africa had contributed to the closure of 440 000 small businesses in the five years to 2011.

The Western Cape MEC (DA) for Finance, Economic Development and Tourism, Alan Winde, welcomed the announcement, but warned that the price hike would hit the already over-burdened consumer and entrepreneurs operating in the small, medium and micro enterprise sector the hardest.

SACCI welcomes announcement

Neren Rau, the CEO of the South African Chamber of Commerce and Industry (SACCI), said: “We believe that in the current economic circumstances the right decision has been made as the capacity of businesses to absorb costs has diminished.

There is no doubt that small, medium and large enterprises still face pressures as indicated in the SACCI Business Confidence Index and in the budget speech.”

Alison Job
Alison Job holds a BA English, Communications and has extensive experience in writing that spans news broadcasting, public relations and corporate and consumer publishing. Find her at Google+.