Cancellation of power debt reinforces culture of non-payment, contributes to hikes in prices

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Cancellation of power debt reinforces culture of non-payment, contributes to hikes in prices
Cancellation of power debt reinforces culture of non-payment, contributes to hikes in prices

It is unacceptable and unsettling that President Cyril Ramaphosa wants to seriously consider writing off overdue electricity bills in Soweto.

Such actions reinforce the culture of non-payment for electricity and directly contribute to exorbitant hikes in the power price, like the 18,65% that NERSA announced on 12 January 2023.

Eskom initially asked the energy regulator for an increase of 32%.

This increase is completely out of touch with the economic realities in South Africa and the fact that most South Africans are living below the breadline.

It will have the greatest impact on the agricultural sector which is, like the rest of the country’s business sector, already struggling to survive due to load shedding.

Consumers who loyally pay for their electricity are being punished because of the government’s incompetence and those who do not pay for their power consumption.

According to Ramaphosa, debt can indeed be cancelled under certain circumstances and on certain conditions.

The FF Plus does not agree with this view at all, seeing as it will allow the culture of non-payment, which was cultivated by the ANC, to flourish.

If the current outstanding debt of nearly R5 billion is, however, written off it will be the umpteenth time that Soweto’s debt is cancelled.

About R17,3 billion of Soweto’s debt has been written off since 2003.

Clearly, Soweto residents simply continued to consume electricity without paying for it.

In addition, government has no plan for dealing with the exorbitant debt owed to Eskom. At present, municipalities’ outstanding debt to the power utility amounts to more than R60 billion.

The central government cannot afford to take on any more of Eskom’s debt, because government debt is also sky-high.

In his Medium-Term Budget Policy Statement (MTBPS), the Minister of Finance, Enoch Godongwana, announced that the Treasury will take over a portion of Eskom’s debt.

Eskom’s debt, however, remains taxpayers’ problem and the ANC government’s cancellation of outstanding debt, as part of a populist election campaign, will put the already overtaxed middle class under even more pressure.

The ANC paid almost no attention to the poor living in townships and informal settlements over the past 30 years.

Instead, the party was solely focused on enriching a handful of cadres and friends at the expense of the poor.

With the 2024 elections around the corner, the ANC is desperately trying to canvass votes with reckless promises. And it will surely blow up in its face.

Read the original article in Afrikaans by Wouter Wessels on FF Plus