South African households should prepare for several price hikes in 2025, affecting essential services and daily expenses. Below is an overview of the key areas where costs are expected to rise:
Electricity Tariffs
Eskom, the state-owned power utility, has proposed a substantial increase in electricity tariffs, seeking a 36% hike in 2025. While the National Energy Regulator of South Africa (Nersa) has yet to finalize the approved percentage, historical trends suggest that consumers may face significant increases. Over the past 13 years, tariff increases have averaged 10.8% annually.
Water Charges
Water Services Authorities (WSAs) across the country independently set water tariffs, and these have consistently risen above the inflation rate since 2017. Factors contributing to these increases include slow growth in infrastructure grants, rising employee remuneration, higher bulk water and electricity costs, and increased debt impairments. This trend is expected to continue in 2025.
Insurance Premiums
The cost of insurance has been on the rise, with a reported 8.3% year-on-year increase in November 2024. Short-term insurers are facing higher claims due to extreme weather events, deteriorating infrastructure, and other risk factors, leading to increased premiums. Notably, medical aid schemes have announced average price hikes of 10.7% for 2025.
Internet and Communication Services
Internet service providers and telecommunications companies are also adjusting their pricing structures:
- Fibre Internet: Major fibre network operators, including Vumatel, Frogfoot, and Herotel, have announced plans to increase their prices in the first half of 2025. These adjustments are attributed to rising operational costs and ongoing investments in network maintenance and expansion.
- Mobile Contracts: MTN South Africa has announced an average 4.4% increase in consumer contract prices, effective February 1, 2025. This includes an average subscription fee increase of 8.3% and a 7% rise in out-of-bundle voice rates. The company cites macroeconomic factors, such as network vandalism, theft, and increased electricity prices, as reasons for the adjustments.
Conclusion
The anticipated increases in electricity, water, insurance, and internet services are poised to impact the cost of living for South Africans in 2025. Staying informed about these changes can help households plan and manage their budgets more effectively in the coming year.
