AfriForum Challenges NERSA on New Eskom Tariff Increases Amid Corruption Concerns

In a significant development, AfriForum, a prominent civil rights organization in South Africa, has announced it will examine the rationality of new tariff increases imposed on Eskom by the National Energy Regulator of South Africa (NERSA). This move comes after NERSA approved substantial escalations in power tariffs for the next three years, significantly below what Eskom initially requested.

AfriForum's intervention is a response to the continuous financial mismanagement highlighted in Eskom’s recent audit outcomes where it received a qualified audit—indicating serious financial and control issues—for the third consecutive year. These financial setbacks reportedly involve substantial unlawful expenses that have plagued the state-owned entity.

On the specifics of the tariffs, NERSA has sanctioned a 12.74% increase for 2025/2026, down from the 36.14% Eskom had applied for, and further increments for the two subsequent years at reduced rates than requested. These decisions, taken just a day after the auditor-general released Eskom's audit report, have raised questions over the reasons behind the reduced tariff increases and whether they still cover some of the inefficient and unlawful expenditures Eskom incurred.

Morné Mostert, Manager of Local Government Affairs at AfriForum, highlighted the organization's concerns regarding NERSA's role in potentially allowing Eskom to recoup mismanaged funds through these public tariffs. He noted the approved rates might still burden consumers with costs that are not justifiable, considering the magnitude of financial mismanagement within Eskom.

Eskom has been under fire for poor management and corruption, significantly impacting its financial stability and operational efficiencies. Public discontent has grown as these issues translate into higher electricity prices for consumers, who, according to AfriForum, should not bear the costs of Eskom's corruption and inefficiencies.

AfriForum's planned investigation into NERSA’s tariff adjustments seeks to determine if these are legally sound and truly considerate of the consumers’ interests. By scrutinizing the basis of NERSA's tariff approval, AfriForum aims to ensure these increases are justifiable and not compensating for Eskom's internal failures.

As South Africa continues grappling with energy challenges, the outcomes of this probe by AfriForum could play a pivotal role in how future tariffs are structured and approved, potentially leading to more stringent oversight and accountability for Eskom. The organization's actions might also pave the way for a more transparent and consumer-friendly approach in regulating power tariffs amidst ongoing fiscal anomalies within key state-owned enterprises.