Africa’s second largest copper producer Zambia is in urgent need of energy surgery as it’s power deficit deepens. The power utility recently announced an 872Megawatt electricity bottleneck widening from 700 MW two months ago due to decline in energy generation at its Kariba, Itezhi tezhi and Kafue gorge station which has resulted in extended rolling blackouts of over 15 hours. Business activity has severely been impacted with the cost environment elevating due to not only autopsy effects of load management but lack of money and waning aggregate demand evidenced by a contracted Purchasing Managers Index (PMI) of 48.3 in October…
Author: The Editor
Acid plant at Nchanga mine in Africa’s copper hotspot.
Amidst rising inflationary pressure as energy risks deepen, the central bank on Africa’s red metal producer Zambia on 14 November hiked its overnight lending rate to commercial banks by 1,000 basis points to 28%. This was confirmed by sources close to the matter. In a communique to commercial banks the Bank of Zambia widened the liquidity spread above the current benchmark interest rate by 1,000 bps to 1,750bps above the policy rate of 10.25%. This will be the highest the central bank has ever tightened the OLF rate since its December 2015 levels when its overnight bank rate facility was…
The power deficit in Africa’s red metal producer Zambia has widened to 872 Megawatts from the 700 MW reported 2 months ago as generation at its Kariba, Itezhi -tezhi stations and Kafue Gorge on receding water levels. This was contained in a press release issued by the energy utility ZESSCO on 13 November. This has resulted in extended load managements hours that consumers are experiencing in excess of 15. As the copper producers energy woes deepen, efforts to plug the deficit are yet to be implemented through imports from South Africa’s Eskom. The power utility applied for a 116% tariff…
The Association of manufactures in Africa’s red metal hotspot Zambia nodded the power utility drive towards cost reflective tariffs. This was contained in a presentation by Vice President Chipego Zulu during a public discussion organized by celebrated think tank Economics Association of Zambia (EAZ) on energy tariff hike and associated impacts. This follows the recent application by the power utility ZESCO to the energy regulator ERB to hike tariffs by circa. 116% to address the negative jaws the company faces. Zambia Association of Manufacturers (ZAM) Veep said her lobby group was supportive of cost reflective tariffs just as long it…
Speaking at a public discussion organized by celebrated think tank the Economics Association of Zambia (EAZ), ZESCO’s Director of Strategy and Corporate Services Patrick Mwila told the audience as he justified the tariff proposal that the power utility is bleeding. In his presentation dubbed, Proposed increase in electricity tariffs: understanding the increment and impact of the economy, Mwila highlighted a 637% widening in the power utilities cost of sales to K5.7 billion (2018) from K0.77 billion (2013) with a lower than expected growth in turnover of 313% in the same period to K9.5 billion. The power utility currently grapples with negative jaws as…
Speaking at a public discussion organized by celebrated think tank the Economics Association of Zambia (EAZ), ZESCO’s Director of Strategy and Corporate Services Patrick Mwila told the audience as he justified the tariff proposal that the power utility is bleeding. In his presentation dubbed, Proposed increase in electricity tariffs: understanding the increment and impact of the economy, Mwila highlighted a 637% widening in the power utilities cost of sales to K5.7 billion (2018) from K0.77 billion (2013) with a lower than expected growth in turnover of 313% in the same period to K9.5 billion. The power utility currently grapples with…
Ebbing dollar demand in Africa’s copper hotspot has weighed its currency weaker to record lows. The Kwacha closed trading on 12 November at a 6 months low, crossing the psychological mark of 14 for a unit of the greenback. The copper currency has been on a losing streak for over a month from levels of 13.05 to current record lows. Given the rise in foreign currency demand to meet debt service, fund energy imports and amass reserves to improve import cover, the Kwacha has come under pressure. With very little ammunition for its central bank to intervene, the copper currency…
Kabwe round about in Lusaka the capital.
President Edgar Lungu addresses the media on the state of the economy in Lusaka on 08 November 2019.