The energy regulator in Africa’s red metal producer on 26 December approved a tariff hike application by the power utility ZESCO to hike electricity pricing by an average of 106% effective January 2020. This was contained in a press release by the regulator signed by the board chairman Raymond Mpundu.
The hiked tariffs are to be used to improved operations at the power utility that grapples with negative jaws and should also cushion energy imports in the energy crisis era. Zambia’s energy utility company charges one of the lowest tariffs in Southern Africa which has made energy investments very unattractive.
Hiking electricity tariffs comes at a time when fuel prices have been hiked 10% compounding Zambia’s economic quagmire. Zambia’s energy deficit remains elevated at 810MW as water levels continue to recede given a prolonged drought spell. With a yearend inflation of 11.7% risks to inflation have been revised even higher to 14-15% for 1Q20 as risks to growth heighten.
The Kwacha Arbitrageur
