Persistent load-shedding could ignite civil unrest, the National Treasury said on Wednesday.
The Treasury is the latest government department to weigh in on the wider implications of the rolling blackouts, which have blighted society and soured the mood in corporate boardrooms.
Addressing a webinar organised by the Public Affairs Research Institute on the effect of load-shedding on municipal services and finances, the Treasury’s local government budget analysis director, Sadesh Ramjathan, said load-shedding was devastating in municipalities and had the potential to “spark community protest and civil unrest”.
Ramjathan said some municipalities mitigated the load-shedding challenge by buying generators but these too come with rising diesel costs.
“Municipalities are faced with diesel costs that are equally draining their coffers, so they are faced with a double-edged sword in this instance”.
While the Treasury was assisting municipalities in financial distress due to diminishing financial revenue, the “government does not have additional funds to assist them”. He said municipalities were owed billions of rand for services rendered and “are not doing enough to collect what’s due to them”.
Silas Mulaudzi, a sustainable energy specialist at the SA Local Government Association (Salga), said the local government sector had not been spared the devastating effects of load-shedding.
Salga is an employer body representing the country’s 257 municipalities, most of which are hamstrung by rampant corruption, fraud, maladministration, and irregular and unauthorised expenditure, which often result in poor service delivery to communities.
Mulaudzi told the webinar that load-shedding was the single biggest constraint on SA’s economic growth and had resulted in financial losses for municipalities due to increased theft of infrastructure such as cables during power cuts, vandalism of infrastructure such as transformers, and damage to substations due to excessive switching on and off. The blackouts also affected the proper functioning of water and sewerage pumps and reservoirs.
The impact on municipalities is huge and includes “abnormally high” overtime budgets, loss of sales revenue and jobs, and reduced revenue.
‘Unsustainable and unaffordable’
Mulaudzi said load-shedding was costing municipalities many billions of rand.
“The cost and loss to municipalities due to load-shedding is substantially high, unsustainable and unaffordable,” he said.
Local governments had to bear the additional costs of deploying private security to assist in preventing theft and implementing early detection of cable theft. And there was the cost of contractors, who were used as and when required to assist in repairs of equipment damaged by load-shedding.
Customers were moving to renewable energy “so municipalities stand to lose paying customers” and at the same time businesses were closing down.
Meanwhile, Tracy Ledger and Mahlatse Rampedi, researchers at the institute who co-authored the book Hungry for Electricity, said the reality on the ground for households was dire.
“We need to think of electricity the way we think of education ... and understand we are undermining [the] entire development agenda by insisting poor people have to pay for services they don’t have,” Ledger said.
“The lack of electricity is a key contributor to poverty on the ground,” said Rampedi.
For “the poorest of the poor ... living without electricity is quite expensive. Energy is essential for our economic growth, it’s supposed to bolster our economic development goals. Access to electricity is key to reducing poverty.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.