ZESA power play


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The Zimbabwe Electricity Authority and Energy Minister, Herbert Ushewokunze, seem to be playing a dangerous game that will ultimately hurt the consumer whom Ushewokunze claims he is trying to protect.

It has been clearly stated that ZESA needs an 85 percent increase in tariffs immediately just to break even. The parastatal is now seeking an 80 percent increase spread over the next financial year beginning in July.

Ushewokunze who should be well versed with the problems the parastatal is facing – now that he has appointed a board of his own choice which one would presume is not corrupt as in the past he argued that the tariffs should not be increased because ZESA was not making money because it was governed by a corrupt board – has emphatically stated there is no way ZESA can be granted this increase which translates to a rise in charges of 7 percent every month as people will not afford it.

The minister is also aware that legally ZESA’s revenue must come from the consumers and must not be subsidised.

So far, the parastatal is expected to make $850 million which is only two-thirds of the expected revenue. Where or how is it going to raise the other third?

While the minister’s argument may sound noble in that he may be appearing to put the consumer first, recent events seem to indicate that the minister could actually be courting disaster as these tariff increases will have to be effected somehow sooner or later.

Delaying the increase will only hurt the consumer more. What is likely to happen is that instead of the consumers paying the 80 percent this coming year, the consumers might find themselves being asked to pay more than 200 percent.

The price of sugar was kept artificially low for some years with the Sugar Refineries complaining about losses. Within the past five months the price of sugar has increased by almost 300 percent and is expected to go up once again. The shortage of sugar which almost rekindled racial tensions when some consumers complained why it was only blacks who were queuing for sugar is no more as shops are now well-stocked.

The price of cooking oil has also risen by over 200 percent and so has that of margarine. Supermarket shelves are now well-stocked and it is one’s purse that now dictates unlike in the past when one could not obtain the products even if one had the money

One might argue that, this badly affects the poor. Indeed, it does. But then keeping the prices artificially low encourages people to live beyond their means, just like the government is doing.

What Ushewokunze seems to be doing therefore is just shedding crocodile’s tears. At the end of the day, the consumer will have to pay the price.

Newspapers went up by 60 percent. There was no outcry. But while in the past newspapers were sold out as soon as they got off the press and the proprietors complained they could not increase their circulations because of shortage of newsprint, they are now getting returns. You can even buy the morning paper after knocking off at 5pm. People can no longer simply afford them.

this good or bad? That’s neither here nor there. Those who genuinely want to keep abreast with the news have devised methods of ensuring they have access to papers. Some are taking turns to buy the paper and sharing it. The same will happen to electricity. If the charge becomes too high, people will reduce their consumption and look at other methods of saving costs.

ZESA itself is quite aware of possible consumer resistance, hence its request to stagger the 80 percent increase. It will therefore increase the tariffs in such a way that the consumer will not feel the pinch.

(21 VIEWS)

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The Insider

The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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