Nudge a nation of non-payers to cough up for their bills

Only rebuilding a sense of national pride and citizenship can unblock the financial supply chain leading from the Soweto electricity meter — where currently only 12% of customers pay their bills. (Gallo)

Only rebuilding a sense of national pride and citizenship can unblock the financial supply chain leading from the Soweto electricity meter — where currently only 12% of customers pay their bills. (Gallo)

COMMENT

The problems facing Eskom have been described as “the biggest challenge facing the country”. But underlying the Eskom crisis is the much wider issue of South Africa’s non-payment culture.

We cannot resolve Eskom without resolving non-payment, which is why Finance Minister Tito Mboweni has made this a precondition of his proposed R59-billion bailout.
The issue reared its ugly head in the mid-term budget, with President Ramaphosa also investing his personal authority in resolving it.

In the fortnight since the Eskom roadmap came out, we have seen evidence of a nation pulling in the same direction. After the Springboks lifted the Rugby World Cup, we felt like a nation that knew what it meant to be South African.

But when it comes to fulfilling payment obligations to Eskom and a whole range of public and private suppliers, it is a different scenario. This one does not pull in the same direction but retreats into mistrust and individualism. “Why should we pay our bills?” people ask.

They think that their money will not go to the right place, or that it is someone else’s responsibility to pay. 

Because the benefits of winning the Rugby World Cup are plain to see, the whole nation joined in. But, because the benefits of paying your utility bills are not, some of the nation sits on the bench. And yet — as hugely proud as we are of our Springbok heroes — the stakes around non-payment are higher.

What we need, therefore, is a similar national heave-ho to get our people out on to the field — rebuilding a sense of national pride and citizenship that can undo decades of damage to our communities. Only this can unblock the financial supply chain leading from the Soweto electricity meter — where currently only 12% of customers pay their bills — to the international financial markets via the municipalities.

READ MORE: ‘Why we don’t pay for power’

By not paying their bills, South Africans are cutting off their noses to spite their faces. Who wants to live in a country which is continually being downgraded by international credit-ratings agencies? And where pressure on tax receipts means government cannot invest in the services that people need?

To be sure, the government understands this can never be solved by a simple top-down approach. Minister of Public Enterprises Pravin Gordhan has already acknowledged that it is first and foremost an issue of community interaction. He has invited the public to come to the game and resolve things together.

But what does the invitation look like? Such a wide ranging and deep-seated issue needs equally sophisticated interaction. Rushing to policy reviews can be counterproductive, and lead to greater disillusionment. One such example would be seeing non-payment as solely a financial problem demanding a financial solution — when both the causes and effects are much broader.

To quote Gordhan’s report: “A new approach is clearly required as all efforts thus far have not succeeded in resolving the problem.” But what is this new approach?

The fact is that international best-practice already exists to develop the type of interaction that is needed. It has been a full decade since the key text in this area was published: Nudge by the American behavioural economists Richard Thaler and Cass Sunstein.

In that time, the growth of big data and social media has hugely enriched the potential of behavioural science both to diagnose and to address such social problems. International knowledge centres now exist — and can be shared.

Such interventions will need to combine public and private sector stakeholders. Government might consider establishing and empowering a cross-ministerial task force capable of acting at all levels of government — co-ordinating policy and initiatives to engage communities in the development and execution of strategies to turn this situation around. But doing that also means any task force must first understand the full problem set.

Indeed, one of the benefits of taking such an approach is its end-to-end nature: starting with detailed diagnostics before moving towards tentative forms of engagement. This is especially valuable with such a multifaceted issue as our non-payment problem.

We know some of the drivers — lack of collection, travelling distances, and the tragedy of the commons (“Why should I pay if my neighbour doesn’t?’). But we cannot pretend to know them all. So we have to identify the dominant drivers and how they intersect, and then start to design the right interventions.

This is where private-sector expertise is needed. It is possible to bring to bear a whole toolbox of related listening methodologies — polling, focus groups, workshops, influencer mapping, and social media listening — to drive the understanding and insights on which effective community-based interventions can be based.

This is work that Africore, has begun to look into; reading relevant literature, engaging experts and doing initial work on the architecture of a national listening exercise that could then provide a platform for generating solutions.

Such work will likely reveal that non-payment is only one part of a much larger Pandora’s Box of disenchantment about rights and obligations as citizens of the republic.

Yet, by opening that Pandora’s Box, government and the nation also have the opportunity to fix the problems that come out of it — which is to say that the benefits of a holistic, interdisciplinary intervention on non-payments could be felt much broadly across the social fabric of the country.

A South Africa where people willingly pay their bills is ultimately a South Africa where the social contract between government and citizen is renewed. Such a virtuous cycle can also be encouraged by a continual process of evaluation and optimisation; which means not only taking the pulse of the problem, but continually taking the pulse of solutions as they are rolled out.

Sadly, the reverse process is also possible — and likely. Letting the non-payment issue continue unaddressed means allowing the social contract to become more and more frayed. It means a widening in the trust-gap between institutions — and a vicious cycle for Eskom specifically, in which it becomes less able to finance itself or to meet its service obligations to customers. In that eventuality, who would be motivated to pay an electricity provider for services that are failing?

With the three most prominent politicians in the country now calling for action on this issue, we have a historic opportunity to change course. Let us grasp the opportunity before it is too late.

Mandla Mchunu is executive chairman of the Africore Group

Mandla Mchunu

Client Media Releases

Fempreneurs shine during EWP gala event
Might as well face it