Zim Metro

Byo against Zesa hike

THE Bulawayo business community has rejected the proposed 49 percent electricity tariff increase by Zesa saying the move will push up production costs.

 At the moment, companies in Bulawayo and the country at large are struggling with liquidity challenges and competition from cheaper imports.

Due to such operational constraints, industry's efforts to increase productivity to competitive levels remains constrained with some companies being compelled to streamline operations or close down.

 Zesa announced that it had applied to the Zimbabwe Energy Regulatory Authority seeking approval to increase power tariffs from 9,86 cents per kilowatt hour to 14,69cents/kWh. The average electricity cost in Southern Africa is 14c/kWh.

Energy and Power Development Minister Samuel Undenge has said the proposal could soon be approved. 

 Zimbabwe National Chamber of Commerce chairperson for Bulawayo, Tshidzanani Malaba, said the proposal was "alarming" in the current economic climate. He said if implemented it was likely to have a distressing effect on the growth of the economy as it would impact on the sectors of the economy that rely heavily on electricity.

"What this means for the country is that the few remaining businesses are likely to incur increased operational costs further constraining local industry’s competitiveness against cheap imports," Malaba said. "Given the prevailing economic circumstances, we call for a downward adjustment in the tariffs so that businesses are able to pay their bills and remain viable."

Malaba noted that if electricity tariffs were reduced, prices of locally manufactured products are also bound to go down.   Participants at the consultative meeting concurred that the current power tariff structure was rendering local companies uncompetitive.

"I believe that during the 2015 mid-term fiscal statement, Finance and Economic Development Minister Patrick Chinamasa announced that that power tariffs to the mining industry, in particular the gold mining sector would be reviewed downwards . . . Unfortunately, this still hasn't happened," said a business executive who preferred not to be named.

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