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Zimbabwe: high electricity costs burdening industry

Across the African continent, from east to south, high electricity costs are stated to be placing industries in a difficult position, as producers are struggling to compete on a global scale.

ESI Africa previously reported that the Kenya Association of Manufacturers (KAM) had stated that the high cost of power in Kenya is making it hard for manufacturers to be competitive amongst other nations.

Recently, the sentiments were echoed by the Confederation of Zimbabwe Industries (CZI) following the national power utility, Zesa, requesting to hike power tariffs from $9,83 cents per kWh to $14,6 cents per kWh.

According to the Herald, the CZI’s president Busisa Moyo said indications by government that it may review the electricity tariff would only further inflate costs.

“It goes against the quest for competitiveness. As a country, we are pushing for competitiveness. We want to see the cost of doing business going down not going up,” Moyo said.

He added that the role of “government is working to improve the ease of doing business”.

Electricity costs going up

It is reported that Zesa had earlier applied to the Zimbabwe Energy Regulatory Authority for a 49% increase in the power tariff to shore up its revenue inflows, but the proposal was shot down.

The power utility has never been able to effect an “economic” tariff since 2009 save for intermittent adjustments, media reported.

Media cited Moyo stating that it is not only the manufacturing sector that is burdened by a cocktail of economic challenges, but every sector including agriculture, mining and tourism.

The CZI president said it was critical that an affordable pricing regime is maintained to enable the manufacturing industry to continue to export foreign exchange earning products and to keep down prices of products consumed locally.

“ZESA must come to the part and not just think of price increase as the solution. We have a formula of what must happen if we are going to have an increase [of power tariff],” Moyo said.


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Babalwa Bungane
Babalwa Bungane is the content producer for ESI Africa - Clarion Events Africa. Babalwa has been writing for the publication for over five years. She also contributes to sister publications; Smart Energy International and Power Engineering International. Babalwa is a social media enthusiast.