Hiked power tariffs detrimental to economic growth – PSDA

HIKING electricity tariffs by up to 200 percent will slow down growth of the industrial base Zambians are trying to create because most manufacturing companies will reduce their production, says Private Sector Development Association (PSDA) chairperson Yusuf Dodia.

Mr Dodia said in an interview that the increase in electricity charges by the Energy Regulation Board (ERB) would do more harm than good to the Zambian economy which was trying to create a strong industrial base.

“It is a very negative move because we are a country that is trying to build industrial base and the only way we can develop that base is by having a competitive manufacturing sector,” he said.

He said most manufacturing industries which were a basis of creating a strong industrialisation base would have difficulties to produce products competitively.

“Unfortunately when electricity tariffs go up, its means a lot of manufacturing investments will have to close down due to high costs of production.

“Zambia will be forced to start determining trading in foreign goods, so the increase is definitely going to make it very expensive to reduce imported products in Zambia,” he said.

Mr Dodia said ERB should also have considered if the tariffs would be affordable to ordinary Zambians unlike only concentrating on attracting investment in the sector.

ERB has with immediate effect increased electricity tariffs by up to 200 percent to make them cost reflective in the wake of severe power deficit that has hit the country.

ERB has adjusted the structure of electricity tariffs for residential consumers to 300 kilowatts from 100, an all-time high increase in as many years with the hope of attracting investment in the energy sector.

With the tariff increase, residential consumers would now have to pay K1.13 from K0.37 per kilowatt, representing an increase of more than 200 percent in tariff charges while commercial consumers would have to pay K154.47 from K55.09.

Social services such as schools, hospitals, orphanages, churches, water pumping and street-lighting would have

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