By BLESSINGS MASHAYA
ZIMBABWE’S parliament has urged power utility Zesa to charge realistic prices and to find ways of earning more foreign currency to help the embattled power utility to procure sufficient electricity for both ordinary consumers and business.
In a post-2023 budget report presented in Parliament on Wednesday by the Energy and Power Development committee, legislators noted that the current electricity tariffs being charged by Zesa were uneconomical and thus needed to be reviewed upwards.
Committee chairperson, Joel Gabuza, also said it was surprising that Finance minister Mthuli Ncube’s 2023 National Budget had not prioritised the country’s worsening power crisis.
This comes as long-suffering Zimbabweans are reeling from the current brutal power cuts, which are effected for long periods lasting between 18 and 24 hours a day in most areas.
“The committee notes with concern that whilst most customers of electricity pay in the local currency, critical inputs such as coal and diesel are paid for in foreign currency.
“In light of this, the committee appreciates that although it is not feasible to charge electricity exclusively in foreign currency, Zesa should devise ways of increasing the share of customers paying in US dollars.
“This can be done through offering incentives to customers paying in US dollars,” Gabuza said.
In addition, he said, the committee’s consultations with the ministry of Energy and Power Development and Zesa had revealed that current electricity tariffs were below cost recovery levels.
“To address this, the 2023 budget should have prioritised the formulation of an electricity pricing policy.
“In addition, the committee recommends that to mitigate the country’s dependency on imports, the government must support IPPs (Independent Power Producers) by giving them import parity tariffs in US dollars.
“Alternatively, the committee recommends that Zesa should consider securing additional power imports, and for electricity imported the tariffs must be cost reflective.
“If the government wants to subsidise this, there should be budgetary support to that effect,” Gabuza said further.
He also said his committee was concerned by the power crisis which had cast a huge shadow on the festive season and plans for businesses for next year.
“In light of the challenges faced at Kariba Power Station, the committee recommends that ZPC (Zesa’s subsidiary the Zimbabwe Power Company) comes up with ways of increasing electricity generation from other existing power plants and scale-up investment in renewable energy sources, especially at government institutions.
“This will help in creating a vibrant renewable energy market in the country.
“The budget statement indicates that the 2023 budget will allocate additional investments to complete the Hwange 7 and 8 projects which were reported to be 95 percent complete in October 2022.
“The statement is silent on the development of new projects such as Batoka Hydropower Scheme and several IPP-initiated renewable energy projects,” Gabuza added.
He also said the committee had noted the government’s desire to clear the Zambezi River Authority (ZRA) legacy debt.
“The debt which started off at about US$16,9 million is due to be completely liquidated at the end of 2024.
“In the initial expenditure ceiling announced in the budget call circular, only $1 billion could be allocated to ZRA, but the final allocation saw the amount being doubled to $2 billion for 2023 and the committee is grateful for this,” Gabuza said.
All this comes as there is growing anxiety over the persisting power crisis which has dampened the festive season mood among both ordinary consumers and businesses.
It also comes after reeling businesses warned this week of potential significant retrenchments if the electricity crisis continues for much longer, while the prices of many basic goods are going up in response to the country’s severe load-shedding.
The spokesperson of the National Consumer Rights Association (Nacora), Effie Ncube, was among those who told the Daily News earlier this week that most Zimbabweans were destined to endure a bleak festive season due to the current power blackouts and the rising prices of many basic goods.
“Owing to the incessant power outages, the rising prices of basic commodities will mean a bleak festive season.
“Basic products are now generally priced well beyond the purchasing capacity of the overwhelming majority of Zimbabweans.
“There is a need for the government to put measures in place that address the cost of doing business and speculative behaviour which are partly responsible for driving prices,” Ncube told the Daily News.
The president of the Confederation of Zimbabwe Industries (CZI), Kurai Matsheza, warned that the power crisis could lead to losses of jobs, as many companies were struggling to remain viable under the circumstances.
“Our production output is getting more reduced … and some of the people are unable to switch on generators as they are expensive to run. And the cost of electricity gets into the cost of output.
“The costs of producing goods and services are going up and naturally businesses will try to recoup and pass on those costs to consumers.
“Firms are going to make losses and nobody can sustain losses. If you are unable to sustain those losses the only other way is to retrench to stay afloat. Some will have to close their businesses and send the workforce onto the streets,” Matsheza said.
On his part, former Finance minister in the government of national unity (GNU), Tendai Biti, said the current blackouts had further disrupted the lives of long-suffering Zimbabweans.
“There is going to be a long depression. Prices are spiking and ordinary people are suffering. People use electricity for survival, cooking and recreation. It’s a complete disaster.
“A power crisis is not something that just happens suddenly. This infrastructure ought to have been retired in the 1980s.
“The government had over 40 years of dealing with the power crisis to ensure that Zimbabwe restores new generation capacity of at least 2 000 megawatts.
“The government was asleep for 40 years. So, we have a disastrous situation which is killing business and making the cost of goods to increase because manufactures are now using diesel and generators, and some are even importing goods privately,” Biti said.
All this also comes after former Energy ministers in the GNU, Elias Mudzuri and Elton Mangoma, urged authorities to re-ignite plans that had been mooted during that time to end the perennial problem of electricity shortage.
Last month, Zesa said it was battling numerous operational challenges, including failing to secure enough coal for its thermal-fired power stations due to a financial crunch.
In addition, to the coal problems, the power utility also said five of its generators were not working due to various other reasons, including Kariba Dam’s precarious current water levels.
As a result, Zesa said this had worsened an already dire situation which has cost commerce and industry hundreds of millions of American dollars in losses this year alone. – Daily News