Restructuring Free Basic Services to Support Equitable Development

This policy brief by the Public Affairs Research Institute (PARI) argues that South Africa's current Free Basic Services (FBS) policy provides only a 'survival level' of electricity and water, which is insufficient to lift households out of poverty. The author proposes restructuring the FBS to provide 'developmental levels' of access—specifically 150kWh of electricity and 8kl of water per month for a targeted group of 7.5 million households—and shifting administration from municipalities to a social grant system managed by an independent agency like SASSA to improve equity and delivery.

• Current free basic services (FBS) provide only a 'survival level' of access, which is insufficient for economic development. While the current free basic electricity (FBE) is 50kWh per month, research suggests a 'developmental level' of access is at least 200kWh, with PARI specifically proposing 350kWh per month to allow for daily cooking, water heating, and small-scale economic activity.
• A developmental level of water access is proposed at 110 litres per person per day, which equates to 13kl per month for a household of four. This is higher than the World Health Organization (WHO) minimum of 50–100 litres per person per day, as the WHO minimum does not account for productive uses like growing food.
• For 40 per cent of the population living below the lower bound poverty line, there is no scenario where they can afford to pay for services above current free levels while maintaining national food security and nutrition objectives. Consequently, the author argues these households should receive developmental level services at a zero tariff.
• The implementation of the FBS programme is described as 'very poor'. Although the national budget funds 11 million households, only approximately 2.5 million receive all the intended services. This failure is attributed to municipalities not passing benefits to residents and imposing onerous conditions on indigent households.
• The author recommends limiting FBS benefits to an estimated 7.5 million households living below the minimum wage household income level (R4,744 per month in 2024). By reducing the number of beneficiaries, the quantum of services can be increased to 150kWh of electricity and 8kl of water per month, costing the fiscus an estimated additional R6.5 billion per annum.
• To resolve spatial inequality and administrative inefficiency, the author proposes moving FBS administration from municipalities to a new social grant administered by an independent agency, likely SASSA. Under this model, SASSA would identify beneficiaries and transfer funds to municipalities or Eskom only after proof of service delivery is provided.
• The brief suggests expanding the 'free basic electricity' component into 'free basic energy' to allow non-grid connected households to use allocations for community-based renewable energy systems or gas, providing more flexibility for the poorest households.

APA

Ledger, T. (2025). Restructuring Free Basic Services to Support Equitable Development. Public Affairs Research Institute. https://pari.org.za/wp-content/uploads/2025/08/20250801_PolicyBrief_FreeBasicServices_Ledger.pdf

Chicago

Ledger, Tracy. Restructuring Free Basic Services to Support Equitable Development. Public Affairs Research Institute, 2025. https://pari.org.za/wp-content/uploads/2025/08/20250801_PolicyBrief_FreeBasicServices_Ledger.pdf.

Wikipedia

{{cite report |last1=Ledger |first1=Tracy |title=Restructuring Free Basic Services to Support Equitable Development |publisher=Public Affairs Research Institute |date=July 2025 |url=https://pari.org.za/wp-content/uploads/2025/08/20250801_PolicyBrief_FreeBasicServices_Ledger.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ledger2025restructuring, author = {Ledger, Tracy}, title = {{Restructuring Free Basic Services to Support Equitable Development}}, institution = {Public Affairs Research Institute}, year = {2025}, month = jul, url = {https://pari.org.za/wp-content/uploads/2025/08/20250801_PolicyBrief_FreeBasicServices_Ledger.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }