HARARE - Confederation of Zimbabwe Industries (CZI) says any hike in electricity tariffs will further erode local industry’s competitive edge.
Energy authorities are planning an electricity tariff increase of around five percent.
Charles Msipa, the industry representative body’s president, said they are “vigorously opposed to any increase in electricity tariffs”.
He said Zesa Holdings (Zesa)’s intention to increase the power price “will spell disaster” for the country’s ailing industry, still suffering a hangover from a decade-long recession.
According to CZI’s 2013 manufacturing survey, industrial capacity utilisation fell from 44 percent in 2012 to 39 percent last year due to lack of cheap credit lines, high labour and electricity costs, water and power outages and ageing machinery among other things.
The planned tariff increase also comes at a time the country is battling to improve electricity generation amid growing demand.
Zimbabwe needs about 2 200 megawatts (MW) but generates around 1 300MW, importing the remainder.
An official with the Zimbabwe Electricity Distribution Company (ZETDC) — a Zesa subsidiary — argues that the proposed tariff hike will help the parastatal improve its operational efficiency.
“Our initial plan was to have a 17 percent increase in tariffs which are cost reflective to our operations. However, after considering the liquidity crunch in the country and our low inflation we decided to settle for five percent,” he said.
“The tariffs we have been awarded in the past have not been sufficient to sustain the minimum activities of the utility,” said the ZETDC official.
The country’s electricity tariffs are currently pegged at 9,86 cents per kWh and are likely to be increased to 10,36 cents per kWh if the five percent proposal is approved.