Power price increase 'will hit economy and the poor'

Eskom’s proposed 53% tariff increase will have a negative effect on the economy, Business Unity South Africa (Busa) said on Tuesday.

Speaking at the second day of public hearings of the National Energy Regulator of South Africa (Nersa), Busa’s Roger Baxter said studies had shown that the economic impact of the hike would reduce the country’s gross domestic product and would lead to about 55 000 job losses.

“... It will have the biggest negative [effect] on the economy,” Baxter said.

“Pricing is not the only solution; effective leadership and strategic appropriation of management is important,” he added

Busa said that time was needed for business and consumers to get used to the increases.

“It is a process, not a one-off event.

It will take long for people to adjust.”

Busa suggested that price increases should be eased in.

The Congress of South African Trade Unions (Cosatu) also rejected Eskom’s proposal, saying it would have far-reaching consequences.

“The proposed increase is not economically viable. It will have devastating effects not only on the poor but also on the economy,” said Cosatu deputy general secretary Bheki Ntshalintshali.

Meanwhile, the Anti-Privatisation Forum said that the increase would impact negatively on the poor.

“It would negatively affect the living standards of people ... especially the poor,” said the forum’s Silumko Radebe.—Sapa