More free electricity proposed for South Africa

Eskom board chair Mteto Nyati has called for the government to increase the free basic electricity (FBE) grant from 50kWh and for municipalities to ring-fence their electricity budgets to ensure the funds go to residents who need them.

Speaking to Newzroom Afrika, Nyati explained that the current 50kWh allocation was defined long ago, adding that it is too small for even small households today.

“The amount of money that is being used now, the 50kWh, it’s so small. That was defined many years ago. It needs to be revised to take care of the inflation,” he said.

“This needs to be something that gets negotiated, and we will come up with a number. That number cannot be 50kWh because that was defined 20 years ago.”

However, Nyati said it would be crucial to consider affordability as the government would be required to fund the increase with an already-stretched budget.

The Eskom chair also said it would be crucial to ring-fence municipal electricity budgets, indicating that much of the funding for FBE disappears and gets used by municipalities for other things.

“So we’re saying: throw that money in the pot so that it gets directed to the people who need it,” said Nyati.

Nyati isn’t the only one advocating for more free basic electricity for indigent households in South Africa.

In October 2024, environmental researcher Dr Neil Overy and EarthLife Africa Johannesburg programs manager Thabo Sibeko highlighted the programme’s failures.

They explained that the 50kWh figure for free electricity per month was set back in 2003 and is far below current consumption levels.

The FBE’s electricity allocation from 2003 was enough to provide basic lighting, basic water heating using a kettle, basic ironing, and a small black-and-white TV and radio.

To qualify, households must be on the lifeline electricity tariff, registered as indigent, or qualify for a pensioner’s rebate on service fees.

However, general electricity demand has increased, with smaller households now consuming between 300kWh and 400kWh of electricity per month.

Public Affairs Research Insitute data from 2023 suggests that the monthly allocation should be 350kWh, seven times the current allocation.

Funds not going to the households that need it

Arguably, a bigger problem with the FBE programme is that most households who qualify for it don’t receive it due to mismanagement of municipal funds.

Only roughly two million of the 10 million South African households that qualify for the grant currently benefit from it.

Energy expert Chris Yelland highlighted this by citing the City of Johannesburg’s (CoJ’s) failures.

“According to the equitable share grant from National Treasury to the CoJ for free basic electricity, there are about 950,000 indigent households in the City of Johannesburg metropolitan area that should be receiving free basic electricity,” said Yelland.

“The City of Johannesburg’s own data shows that about 670,000 households live below the lower-bound poverty line.”

“However, self-reported data by the City in the annual StatsSA non-financial census of municipalities further indicates that just under 30,000 indigent households are on the indigent register to receive free basic electricity,” he added.

This means that between 95% and 97% of all indigent households in the Johannesburg metropolitan area are not on the indigent register to receive free basic electricity.

Overy and Sibeko blamed municipalities, explaining that poor oversight caused the scheme’s incorrect distribution.

They said many municipalities absorbed funds earmarked for FBE into their general budgets.

“The FBE system needs a complete overhaul,” the two said.