# **SOUTH AFRICA**

The international benchmarking of infrastructure performance in South Africa presented in this section draws almost entirely on a recent exercise for South Africa by Bogetić and Fedderke (2006b). For South Africa, we use from the aforementioned data base the available indicators for electricity (7), water & sanitation (4), and most of the broader group of indicators for information communication technology (13) and transport (10). For our purpose, this country’s benchmarking is limited to _sector performance_ indicators. Detailed benchmarking is presented in Tables 1-4. We do not use nor discuss institutional reform indicators that are also available in the database, and are subject of a separate exercise. In the following discussion, we focus on some of the most important conclusions.

## **Energy––electricity**

**Overall assessment.** Overall, despite important gains in recent years, South Africa’s performance in the electricity sector (measured by the seven indicators discussed below) compared to the upper-middle-income country benchmark is relatively weak in terms of access, but favorable in terms of technical efficiency (i.e., percentage of losses), pricing, and perceptions of service. Since 1994, a significant area of policy success has been to increase service access, but the level remains behind the average expectation for upper middle-income countries. Low aggregate losses reflect solid internal technical efficiency of the electricity network, but this hides the problem of occasional outages in specific areas, even in large cities such as Johannesburg. Low prices reflect the comparatively low cost of South Africa’s electricity (produced almost exclusively from coal) and the fact that a good part of the capital stock has already been depreciated as there has been little investment in the sector over the past two decades.<sup>6</sup> Finally, local perceptions of service have been rather favorable, but this may have reflected a selection bias in that only customers that do have service provision responded to this question. The overall picture, therefore, suggests that despite recent gains, the main weakness in South Africa’s electricity sector lies in access, which remains limited, particularly in terms of service delivery to the poor (Table 1 and Figures 1-2).

**_Access_** .  Not surprisingly, South Africa’s access to the electricity network is superior to the rest of Sub-Saharan Africa (SSA) with 66% of the _population_ having access, compared to 15% for region as a whole.<sup>7</sup> Access has also risen substantially in South Africa, from some 30% ten years ago reflecting the success to date of the policy of widening access to the electricity network. Nevertheless, South Africa’s level of overall access remains significantly behind—by about a third—its own income group of uppermiddle-income countries (87%). A related (and corroborating) statistic focusing on _households_ indicates that about 65% of all households in South Africa report having access to electricity compared to 23% for the SSA region and 74% upper-middleincome countries. Compared with other regions of the world, South Africa performs better than South Asia and East Asia Pacific.

> 6 With significant new investments being planned by ESKOM over the coming years, prices are likely to increase. 7 The database observation for South Africa is from 2002. More recent country data suggests an access rate of 70% (UNDP/WorldBank 2005), but the overall conclusion remains the same.

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