It's the latest thing to hail South Africa’s townships and rural towns as untapped economic powerhouses.
Yet, a mounting crisis demands urgent attention: the staggering cost of electricity.
For many township-based businesses, electricity is the main barrier to sustainability, growth and employment.
It's not just a utilities bill challenge — it's a slow suffocation of grassroots economic life.
Over the past decade, the average electricity tariff in SA has increased by more than 450%, far outpacing inflation, wages, and turnover growth.
Nersa-approved Eskom data shows electricity prices jumped from 24c/kWh in 2007 to well over R1.50/kWh by 2023.
These increases have rippled across the economy, but for informal and micro-enterprises operating on razor-thin margins, the impact is existential.
In Buffalo City Metro, the situation is dire.
SMEs in light manufacturing, hospitality and the service sectors find themselves crushed between high fixed costs and volatile customer demand.
Large corporations can negotiate bulk supply, turn to solar or pass on costs to consumers.
The average township business is left without options.
The reality on the ground is harsher still.
Some enterprises attempt to access municipal rebates and support, only to find the systems convoluted or inaccessible.
A concerningly high number are simply excluded from the grid because their buildings — which are often informal or shared-use structures — do not meet compliance standards.
And when they are connected, municipal surcharges and "small user" classifications often mean they pay far more per kilowatt than businesses in formal industrial zones.
Others resort to illegal connections out of sheer desperation.
But this is not only a problem of price. Infrastructure paralysis stretches from Duncan Village to Mdantsane, Zwelitsha and Dimbaza. Mthatha, too, once had state-owned industrial parks buzzing with activity.
Now, they all stand abandoned.
These factories and industrial zones, meant to catalyse township production, are shells of failed policy promises — their broken roofs and rusting equipment daily reminders of what could have been.
This wasted infrastructure, when paired with inflated tariffs, is a double blow.
We cannot talk about reviving the township economy without acknowledging that production and manufacturing — where real economic multipliers lie — are simply unviable with these cost structures.
When the price of running a single industrial oven, cold storage unit, or sewing line outweighs income generated, the system is beyond broken — it is punitive.
BCM, like many municipalities, faces its own fiscal pressures, but it cannot afford to ignore this crisis.
The old model, where electricity was a profit-generating arm of local government, must be reconsidered. Electricity has to be seen as an economic enabler.
This may require some painful trade-offs — but not nearly as painful as the growing joblessness, rising informality, and disillusionment that the current inaction breed.
What can be done?
*First, municipalities must reclassify small and micro-enterprises to ensure a more workable tariff, different to either residential users or large corporations.
A special tariff band for township enterprises, particularly those in industrial development zones, could be subsidised through national and provincial grants.
*Secondly, a strategic revival programme for abandoned industrial parks. With affordable electricity, these sunk investments could be nodes for local manufacturing and co-operative production.
Public-private partnerships could be structured to manage these zones while ensuring ownership remains within local hands.
*Third, rebates and incentives must not remain on paper. They need local facilitation offices within townships — not just urban CBDs — staffed with officers who understand township dynamics.
The process to apply for municipal rebates or energy-efficient equipment subsidies should be radically simplified and digitalised.
*Finally, alternative energy solutions, such as solar microgrids or shared battery banks, must be piloted in township industrial zones.
With proper governance, such initiatives could cushion vulnerable enterprises from the full shock of Eskom-linked price hikes.
Electricity is not a luxury; it is the lifeblood of a productive economy.
Not a commodity, but a vital aspect of infrastructure, on par with roads, water and sanitation.
Until If we truly believe in township revitalisation, then we must stop treating electricity access as a then, the gold of township and rural enterprise will remain buried—not for lack of ideas or effort, but because the lights were simply too expensive to keep on.
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