Tariff Hike

THAT electricity supply in Zambia cannot meet demand is a reality that must be acknowledged by all.
The demand, especially at peak times, always outstrips supply leading to load shedding.
The pressure has been exacerbated by the steady economic growth averaging 5 percent per annum. This has included greenfield developments in copper mining whose appetite for power is almost insatiable.
The solution to this perennial power deficit is to increase capacity in generation through hydro, solar, wind, biomass, bio-fuel and geo-thermo investment.
Unless we take this route Zambia will continue to underperform in the presence of abundant potential. It is equally unrealistic to expect Government to undertake this investment because of the limited resources it commands.
Therefore a Government and private sector partnership is called for, but this demands that an appropriate climate supported by effective policies is implemented to make the sector attractive.
In this regard an electricity tariff hike is inevitable.
Unless we pay for the service, the private sector will not invest and the government itself will not find the money to refurbish and constantly upgrade the generation system.
It has been stated without challenge that Zambia has among the lowest electricity tariffs in the region partly because Government has resisted any attempts to increase tariffs in the hope of protecting the vulnerable to whom electricity is being extended through the rural electrification programme.
Time has come that we face reality that without appropriate funding, electricity capacity will continue to diminish to a point where our mines, agriculture, industry, hospitals and indeed domestic homes will not have enough power to run effectively and efficiently.
Time has come when Zambia must bite the bullet and seriously review tariffs in order to provide the finance that will power new generation that will in turn support higher productivity and increase GDP.
It is only when we have enough that the country can consider extending to the poor and marginalized. A subsidy for the poor will remain a pipedream for as long as the country is unable to generate a surplus due to a power deficit.
There is no doubt that our GDP this year will be very seriously eroded due to the intermittent power outages affecting all industries.
Fortunately speedy Government intervention has saved the mines from the worst of load shedding and thereby saving jobs and copper production.
The next stage requires that Government takes deliberate measures to create attractive incentives that will motivate the private sector to invest for profit as energy generation is a business like any other.
The country has abundant resources in all the generation areas especially hydro because of the huge water body that God has so kindly endowed this country with.
Our failure to develop and exploit this resource can only work against the country’s best interest, and slow down the much needed development.

Categorized | Editorial

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