Out of Africa: Persistent Plague of Electricity Theft

The severe electricity shortage gripping sub-Saharan Africa -- and especially the region's largest economy -- South Africa is bringing fresh attention to a longstanding problem: organized and widespread theft of electricity.

In South Africa alone, Eskom, the chief provider, is believed to lose hundreds of millions of dollars of revenues a year to thieves. Some of the losses are due to non-payment of bills, but a significant amount comes from unauthorized tapping of electricity lines.

Theft of electricity in Africa worsens the shortage by robbing companies of revenue needed for expansion. Sometime the thefts take place with the assistance of employees of electricity companies. Poor service by electricity companies also can fuel resentments that can be expressed through forms of customer protests which include theft or non-payment of bills.

In Uganda, for instance, customers are frustrated with an electricity provider who routinely blames high theft for poor service. Last year the government-owned New Vision newspaper published an article by an energy expert who argued, "It is not fair for an innocent power consumer to pay exorbitant tariffs because of the service provider has failed to stop theft."

Because losses to theft can be so high -- in some places, such as Uganda, as much as a third of the potential revenues are lost -- some African electricity providers have experimented with pre-paid services, offering a discount to new customers if they agree to accept meters that require an electronic debit card to work. In Ghana, the national electricity company has sharply reduced losses due to non-paynment of bills by requiring most new customers to accept the pre-pay meters. The payment cards are refilled by paying cash at offices of the electricity company.

Despite the success of the pre-pay program, Ghana is believed to lose as much as one quarter of its electricity revenues due to theft, complicating efforts to upgrade service.

Efforts to crack down on scofflaws can be difficult. In Cameroon, where the U.S. electricity company AES owns the national provider, raids on organized thieves are common. Company security officials come prepared to tear down illegal networks and even raid businesses suspected of tapping lines.

Electricity theft can cause a vicious cycle, where providers raise rates because of high losses, which in turn gives customers more incentive to steal more electricity. In Cameroon, for instance, thefts skyrocketed several years ago after a series of rate increases. When rates stabilized, thefts declined.


Newsletter Sign Up

Sign up for the EnergyWise newsletter and get biweekly news on the power & energy industry, green technology, and conservation delivered directly to your inbox.