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 will result in a steady flow of power to support factory activity, Zulu said. She highlighted the importance of power to the manufacturing agenda and that disruptions have cost the sector growth. Zulu stressed the need for the cost of service study to be completed so as to determine the accurate optimal electricity rates that would make the utility more operational efficient and acknowledged the consultation the power utility has made in its journey towards improving power generation.
Zambia grapples with an energy deficit that manufacturers have borne the brunt of in extended load management. Speaking at the same function ZESCO Strategy Head Patrick Mwila said the utility was bleeding through fast rising costs over 637% matched by 313% turnover uptick over the last 5 years.
EAZ President Dr. Lubinda Habazooka however reminded the audience of Zambian immense installed capacity second to South Africa in the region and the potential it has to be a hub of exports when operating at full capacity. He echoed the need to diversify energy generation to nuclear which is a more sustainable and stable source.
Dr. Habazooka in his presentation dubbed Electricity Tariffs in Africa – A Southern Africa Perspective said ZESCOs tariffs were the lowest in the region and that this was the argument against the mines that have for decades claimed high power costs pushing production costs as justification for not paying higher mining taxes.
CUTS Centre Coordinator Chenai Makumba urged the power utility to bear part of the cost burden, as it was passing onto consumers through a proposed tariff hike, by relooking it alleged huge staff cost as was similarly highlighted by the Industrial Development Corporation (IDC).
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